If Real Output Is Currently Less Than the Natural Level

question 108

Multiple Choice

If real output is currently less 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 inflationary gap smaller.
• C)It will make the current inflationary gap larger.
• D)It will make the current recessionary gap larger.

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Definitions:

Union Workers

Employees who are members of a labor union, which represents their interests in negotiations with employers.

Employers

Individuals or organizations that hire and pay people to work for them, typically controlling the terms of employment.

Norris-LaGuardia Act

A 1932 United States federal law that limited the power of federal courts to issue injunctions against non-violent labor disputes and marked a shift towards protecting labor rights.

Labor-Management Relations

The interactions between employees, often through their unions, and employers, focusing on negotiation, agreements, and working conditions.