Suppose Real GDP Is $13 Trillion and Potential Real GDP

question 153

True/False

Suppose real GDP is $13 trillion and potential real GDP is $13.5 trillion.If Congress and the president increase government purchases by $500 billion,then the economy will be brought to equilibrium at potential real GDP.

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Definitions:

Recognition

The process of identifying something you have seen, known, or experienced before.

Recall

The cognitive process of retrieving information from memory, often studied in the context of understanding how experiences and knowledge are encoded, stored, and retrieved.

Relearning

The process of learning material or skills that were previously learned and then forgotten.

Prefrontal Cortex

The front part of the frontal lobes of the brain, involved in complex behaviours including planning, decision making, and moderating social behaviour.