If Real Output Is Currently Greater Than the Natural Level

question 9

Multiple Choice

If real output is currently greater than the natural level of real output,what impact will an increase in aggregate demand have on the market?

• A)It will make the current recessionary gap smaller.
• B)It will make the current recessionary gap larger.
• C)It will make the current inflationary gap smaller.
• D)It will make the current inflationary gap larger.

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Definitions:

Lawrence Kohlberg

An American psychologist best known for his theory of stages of moral development.

Conservation

The protection, preservation, management, or restoration of natural environments and the ecological communities that inhabit them.

Nickels

A denomination of currency in the United States worth 5 cents.

Pennies

A form of currency in many countries, often the smallest denomination within the currency system.