When Output Is Greater Than the Economy's Long-Run Capacity, Which

question 53

Multiple Choice

When output is greater than the economy's long-run capacity, which of the following is most likely to occur?

• A) a reduction in the general level of prices
• B) an abnormally high rate of unemployment
• C) increases in real interest rates and real resource prices
• D) a reduction in imports

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Definitions:

Farsighted

The ability to anticipate and plan for the future with insight.

Iron-enriched Cereal

A type of breakfast cereal that has been fortified with additional iron to help in preventing iron deficiency.

Cephalocaudal Development

A pattern of growth in which development occurs from the head downwards through the body to the feet.

Growing Spurts

Growth spurts are periods of rapid physical growth and development typically observed in children and adolescents.