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:

Relevance

The importance or pertinence of something in relation to a specific matter or context.

Decision Making

The process of selecting the best alternative from several options to achieve a specific goal.

Irrelevant Information

Information that does not impact decision-making in a current context.

Decision-making Process

The series of steps taken by individuals or organizations to choose a course of action among several alternatives.