Suppose That GDP Is ________ Potential Output

question 49

Multiple Choice

Suppose that GDP is ________ potential output. We would expect prices to fall, money demand to fall, interest rates to fall, and total demand to ________.

• A) above; rise
• B) above; fall
• C) below; rise
• D) below; fall

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Definitions:

Proxy Fights

Proxy fights occur during shareholders' meetings when opposing groups of shareholders solicit votes from other shareholders to win control over the company's board of directors.

Board of Directors

A group of elected or appointed members who jointly oversee the activities of a company or organization.

Efficient Market Hypothesis

The theory that all existing information is already reflected in securities prices, thus making it impossible to consistently achieve higher returns.

Dissemination

The process of spreading information, knowledge, or ideas to a large number of people.