Suppose Actual GDP Is $10 Billion Below Potential GDP

question 121

Multiple Choice

Suppose actual GDP is $10 billion below potential GDP.How can the economy achieve long-run equilibrium using a passive approach?  

• A) Policymakers can stimulate aggregate demand. 
• B) The short-run aggregate supply could shift outward. 
• C) The short-run aggregate supply curve could shift to the left. 
• D) Policymakers can reduce aggregate demand.

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Definitions:

Confidence Interval

A range of values, derived from sample statistics, that is believed to contain the true value of an unknown population parameter with a specified level of confidence.

Margin Of Error

A statistic expressing the amount of random sampling error in a survey's results, indicating the expected range in which the true value lies.

Sample Size

The number of observations or individuals in a subset of a population selected for analysis or experimentation.

Hypothesis Test

A statistical method used to determine whether there is enough evidence in a sample of data to infer that a certain condition holds for the entire population.