If Short-Run Equilibrium Output Equals 20,000 and Potential Output (Y*)equals

question 38

Multiple Choice

If short-run equilibrium output equals 20,000 and potential output (Y*) equals 25,000, then this economy has a(n) ________ gap that can be closed by ________.

• A)recessionary; increasing taxes
• B)expansionary; increasing transfer payments
• C)expansionary; increasing government purchases
• D)recessionary; increasing government purchases

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Meetup Group

A localized online platform that allows people with similar interests to organize and attend face-to-face events.

Entrepreneurs

Individuals who identify business opportunities and take the initiative to create and manage enterprises with the aim of making a profit or driving social change.

Local Chamber of Commerce

A form of business network whose goal is to further the interests of businesses in a locality.

Nonprofit

Organizations that operate for the public or social benefit without the intention of making profits for owners or shareholders.