Figure 9-4 ​

question 177

Multiple Choice

Figure 9-4
​
-In Figure 9-4, if the economy is in a recessionary gap, what must happen to reach potential GDP?

• A)The expenditure level must fall and/or the price level must rise.
• B)The expenditure level must rise and/or the price level must fall.
• C)The expenditure level must rise and/or the price level must rise.
• D)The expenditure level must fall and/or the price level must fall.

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Definitions:

Hedging

A strategy used to reduce or eliminate the risk of adverse price movements in an asset, often by taking an offsetting position in a related security.

Transformation Process

The series of actions or operations conducted in manufacturing or service environments that convert inputs into finished products or outcomes.

Outputs Produced

Refers to the quantity or volume of products or services generated by a business or production process.

Inputs

Resources such as raw materials, labor, and capital that are utilized in the production process to create goods or services.