If the Expenditure Schedule Must Be Shifted Downward to Reach

question 176

Multiple Choice

If the expenditure schedule must be shifted downward to reach potential GDP, then the economy is experiencing a(n)

• A)inflationary gap.
• B)precautionary gap.
• C)restrictive gap.
• D)expansionary gap.

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Definitions:

Three-Fifths Compromise

A historical agreement made during the 1787 United States Constitutional Convention, counting three out of every five slaves as people for determining state representation and taxation.

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The governing body of the United States under the Articles of Confederation, in operation from 1781 to 1789.

National Commercial Policy

A governmental strategy designed to promote trade, investment, and economic growth within a nation.

Land Ordinance

A foundational legislative act passed in 1785 by the United States Congress for the systematic surveying, planning, and sale of land in the Northwestern Territory.