The Model Predicts That an Economic Expansion Caused by a Temporary

question 31

Multiple Choice

The model predicts that an economic expansion caused by a temporary increase in technology, A, would lead to:

• A)high real GDP and investment.
• B)low real GDP and high real investment.
• C)low real GDP and investment.
• D)high real GDP and low real investment.

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Definitions:

Demand-Pull Inflation

occurs when prices rise because the demand for goods and services exceeds supply.

Price of Houses

The amount of money required to purchase residential properties, influenced by factors such as location, size, and market conditions.

Sharp Increase

A rapid and significant rise in a particular metric, such as price, volume, or value.

Structural Unemployment

A form of unemployment caused by shifts in the economy or changes in technology that create a mismatch between the skills of the workforce and the needs of employers.