Starting from Potential Output, If Firms Become Less Optimistic and Decide

question 18

Multiple Choice

Starting from potential output, if firms become less optimistic and decide to decrease their investment in new capital, then this will shift the ______ curve to the left and generate ______.

• A)aggregate demand; a recessionary output gap
• B)aggregate supply; a recessionary output gap
• C)aggregate demand; an expansionary output gap
• D)aggregate supply; an expansionary output gap

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Definitions:

Overweight Babies

Overweight babies are infants whose weight is significantly higher than what is considered normal for their length and age, often resulting from factors such as overfeeding or genetic predispositions.

Undernourishment

The condition of not having enough food or the right type of food to lead a healthy life.

Multiple Risk Factors

A combination of attributes, characteristics, or exposures that increases the likelihood of developing a disease or injury.

Teratogenic Agents

Substances or environmental factors that can lead to congenital abnormalities or developmental disorders when a fetus is exposed during pregnancy.