A Negative GDP Gap Can Be Caused by Either a Decrease

question 25

True/False

A negative GDP gap can be caused by either a decrease in aggregate demand or a decrease in
aggregate supply.

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Definitions:

Payback

The period of time it takes for an investment to generate an amount of income or cash equal to the cost of the investment.

Discounted Payback

A capital budgeting method that calculates the time needed to recoup the initial investment in present value terms.

Compute

The process of using mathematical and logical operations to perform tasks and solve problems by a computer.

Average Accounting Return

The average accounting return is a financial ratio that represents the average annual accounting profit compared to the initial investment.