Starting from Potential Output, If Consumer Confidence Increases and Consumers

question 29

Multiple Choice

Starting from potential output, if consumer confidence increases and consumers decide to spend more, then this will generate a(n) ________ gap and inflation will ________.

• A)recessionary; increase
• B)recessionary; decrease
• C)expansionary; decrease
• D)expansionary; increase

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Definitions:

Smooth Flow

The unimpeded progress or movement of something, ensuring continuity and efficiency.

Nominal Brainstorming

a technique where group members generate ideas individually to avoid influence from others.

Brainstorming Literature

Literature that provides insights or methods on generating ideas and solutions through collective discussion or thought processes.

Communication

The act of transferring information from one place, person, or group to another, through speaking, writing, or using some other medium.