Consider an Economy That Is Both in Long-Run and Short-Run

question 65

Multiple Choice

Consider an economy that is both in long-run and short-run equilibrium. Which of the following is likely to cause a positive output gap?

• A) An increase in production costs due to an increase in oil prices.
• B) A substantial increase in interest rates.
• C) Implementation of new technology that increases productivity of existing workers.
• D) Introduction of higher income tax rates.

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Definitions:

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Numeric values without decimal parts, used in programming and mathematics.

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In programming, an enumeration is a data type allowing variables to be assigned names to integral constants, making the code more readable.

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A name defined by the programmer that represents variables, functions, or other entities within the code.