Suppose an Economy Is Operating with a Contractionary Gap

question 128

Multiple Choice

Suppose an economy is operating with a contractionary gap.In this case, policymakers would seek to move the economy

• A)back down the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
• B)up the Phillips curve toward an unemployment rate that is closer to the natural rate of unemployment.
• C)back down the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.
• D)up the Phillips curve toward an unemployment rate that is further from the natural rate of unemployment.

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Definitions:

Recall

The mental process of retrieving information from the past, often used in the context of memory and cognitive psychology.

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The concept that individuals construct understanding and knowledge of the world through experiences and reflections.

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Feeling or expressing great joy or happiness, often as a result of a particular event or accomplishment.