If Potential Output Equals 4,000 and Short-Run Equilibrium Output Equals

question 101

Multiple Choice

If potential output equals 4,000 and short-run equilibrium output equals 3,500, there is a ________ gap and the Federal Reserve must ________ real interest rates in order to close the gap.

• A)recessionary; raise
• B)recessionary; reduce
• C)recessionary; not change
• D)expansionary; raise

---

Definitions:

Society

A group of individuals living together in a more or less ordered community that shares common customs, laws, and social structures.

Deviant Act

Behavior that violates social norms or values, which can range from minor breaches of etiquette to major violations such as criminal activity.

Constructionist Sociologists

Explore how societies come to understand and define criminal behavior and social norms, focusing on the social constructions of reality.

Demographic Facts

are statistics that relate to the population and particular groups within it, such as age, race, gender, income, and education levels.