Suppose an Expansionary Gap Is Closed in the Long Run

question 81

Multiple Choice

Suppose an expansionary gap is closed in the long run by firms' actions.How will output level and price level be affected?  

• A) Output will decrease and price level will increase. 
• B) Output will increase and price level will decrease. 
• C) Output will increase and price level will increase. 
• D) Output will decrease and price level will decrease.

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Definitions:

Community Needs

Refer to the essential services, resources, and support required by a community to ensure the well-being and development of its members.

Initiatives

Projects or strategies introduced to address specific issues or achieve particular outcomes.

Fair

Fair, in a general sense, refers to being free from bias, dishonesty, or injustice, typically in the context of treatment of individuals or distribution of resources.

Responsive

Being sensitive to and readily reacting to the needs, feelings, or changes in situation of others or oneself.