Which of the Following Is True of a Recessionary Gap

question 70

Multiple Choice

Which of the following is true of a recessionary gap?

• A)It develops when the expected price level is less than the actual price level.
• B)In the long run,this gap closes when resource suppliers negotiate lower resource payments.
• C)It measures the amount by which actual output is greater than the economy's potential output.
• D)In the long run,this gap closes when the short-run aggregate supply curve shifts rightward.
• E)In the long run,this gap closes when the aggregate demand curve shifts rightward.

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Definitions:

Nature of Agency

Refers to the relationship established when one party, the agent, is authorized to act on behalf of another, the principal, in dealing with third parties.

Agency Coupled

A legal arrangement where an agent has an irrevocable authority primarily for the agent's benefit, based on an interest in the subject matter of the agency.

Liable

Legally responsible or obligated to provide compensation for harm, loss, or damage caused.

Irrevocable

Unable to be changed, reversed, or recovered; final.