When Real GDP Is Less Than Potential GDP, an Increase

question 101

Multiple Choice

When real GDP is less than potential GDP, an increase in government expenditures will ________ real GDP and ________ the price level.

• A) increase; raise
• B) increase; lower
• C) decrease; raise
• D) decrease; lower

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Definitions:

Social Scientific Evidence

Information and insights derived from systematic study of society and the behaviors of individuals within society, using methodologies of the social sciences.

Immigrants

Individuals who move from their country of origin to live in a foreign country, often seeking better living conditions, employment, or educational opportunities.

Lifetime Likelihood

The probability or chance of encountering or experiencing a particular event or series of events over the course of a lifetime.

Imprisonment

The state of being confined in prison as a punishment for crimes committed.