If an Economy Initially Starts Away from the Steady State

question 34

Multiple Choice

If an economy initially starts away from the steady state ________.

• A)output will gradually fall over time
• B)the economy will converge to the steady state in the long-run
• C)consumption spending must be greater than investment spending
• D)consumption spending must rise

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Definitions:

Contract

A legally binding agreement between two or more parties that outlines obligations and rights.

Principal

In a legal context, the principal is the party who grants authority to an agent to act on their behalf in legal or financial matters.

Apparent Authority

A situation where someone appears to have the power to act on behalf of another (such as an employer), even if they do not have actual authority.

Ratify

To formally approve or confirm an agreement or act, making it officially valid.