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

question 22

Multiple Choice

Starting from potential output, if firms become more optimistic and decide to increase their investment in new capital, then this will shift the ______ curve to the right 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:

Work Environment

The physical and psychological conditions under which employees perform their job duties.

User Account

A personalized set of access permissions and settings for an individual user of a computer or online service.

Sound Settings

Options within a device or application that control audio features, including volume, output devices, and sound effects.

Magnifier

A tool or application that enlarges text, images, and other objects on the screen to make them easier to see.