As a Contractionary Gap Is Closed in the Long Run

question 115

Multiple Choice

As a contractionary gap is closed in the long run by firms' actions,

• A)nominal and real GDP both decline
• B)nominal and real GDP both increase
• C)nominal GDP increases but real GDP declines
• D)nominal GDP declines but real GDP increases
• E)real GDP increases,but nominal GDP can increase,decrease,or remain the same

Recognize the role of price in consumer demand and surplus.

Apply concepts of utility to analyze consumer demand schedules.

Grasp the principle of diminishing marginal utility.

Evaluate consumer choices based on utility maximization.

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Definitions:

Other Expense

Expenses that do not fit into the usual categories of operating expenses in a business, such as lawsuit settlements or loss on asset disposal.

Redemption

In finance, refers to the repayment of a debt security or preferred stock at or before its maturity date. In the context of investments, it can also mean the selling of mutual fund shares back to the fund.

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified call price.

Future Interest Rates

Expected rates of interest in future periods, often projected based on current economic conditions and trends.