Suppose the Economy Is in Macroeconomic Equilibrium with Real GDP

question 110

Multiple Choice

Suppose the economy is in macroeconomic equilibrium with real GDP equal to Y*.If the government then implements an expansionary fiscal policy by increasing government purchases,what are the long-run effects on potential output?

• A)The growth rate of potential output may be reduced due to the crowding out of private investment.
• B)Potential output will adjust to the new higher level achieved with the expansionary fiscal policy.
• C)Potential output will drop below its starting point because of the crowding out of investment.
• D)The growth rate of potential output will rise due to the higher level of aggregate demand.
• E)The level of potential output is fixed and will not be affected by fiscal policy.

Know how learning is demonstrated through behavioral changes.

Understand observational learning and its relation to cognitive processes.

Understand the guidelines for interpreting and analyzing graphics.

Comprehend the principles of graphic design and their application.

---

Definitions:

Social Media

Online platforms that enable users to create and share content or to participate in social networking.

Structured Slides

PowerPoint or similar presentation slides that are organized in a coherent manner to logically present information and aid understanding.

Nonverbal Signals

Communication methods that do not involve words but rather gestures, facial expressions, and body language to convey messages.

Transition Slides

Slides used in presentations to mark a change in topic or to signal a move to a new section, helping to keep the audience engaged and informed.