If Short-Run Equilibrium Output Equals 20,000 and Potential Output (Y*)equals

question 38

Multiple Choice

If short-run equilibrium output equals 20,000 and potential output (Y*) equals 25,000, then this economy has a(n) ________ gap that can be closed by ________.

• A)recessionary; increasing taxes
• B)expansionary; increasing transfer payments
• C)expansionary; increasing government purchases
• D)recessionary; increasing government purchases

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Definitions:

Linguistic Relativism

Theory suggesting that the language one speaks influences one's perception of reality and cognitive processes.

Bilingual

Characterizing someone who can fluently speak two languages.

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The mental process of imagining the outcome of a specific action or scenario, often used in decision-making or goal setting.

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