A Recessionary Gap Occurs When

question 163

Multiple Choice

A recessionary gap occurs when

• A)the price level is too low.
• B)equilibrium real GDP is greater than potential GDP.
• C)equilibrium real GDP falls short of potential GDP.
• D)the government does not stimulate investment spending.

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Definitions:

Salinity

The measure of the amount of dissolved salts in a given amount of liquid.

Mangrove Swamp

Coastal wetlands found in tropical and subtropical regions, characterized by salt-tolerant trees and bushes adapted to high salt and brackish water conditions.

Euphotic Zone

The upper layer of a body of water that receives sufficient sunlight for photosynthesis, where most aquatic life is concentrated due to the availability of light.

Phosphate

A chemical compound that is vital for plant growth and is used extensively in fertilizers.