If Real GDP Is Greater Than Potential GDP,the Output Gap

question 20

Multiple Choice

If real GDP is greater than potential GDP,the output gap could be eliminated by
1) an increase in government purchases;
2) an upward shift in the AE curve;
3) a reduction in the money supply.

• A)1 only
• B)2 only
• C)3 only
• D)1 or 2
• E)1 or 2 or 3

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