Starting from Potential Output, If Consumer Confidence Decreases and Consumers

question 91

Multiple Choice

Starting from potential output, if consumer confidence decreases and consumers decide to spend less, then this will generate a(n) ________ gap and inflation will ________.

• A)recessionary; increase
• B)recessionary; decrease
• C)expansionary; decrease
• D)expansionary; increase

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Definitions:

Fats

Organic compounds that are made up of glycerol and fatty acids, serving as a major energy source and important for various bodily functions.

Crown

The part of a tooth that is visible above the gum line, or the top part of a plant including the branches and leaves.

Tooth

A hard, calcified structure found in the jaws of many vertebrates, used for biting and chewing food.

Pepsin

An enzyme produced in the stomach that initiates digestion of protein.