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The Diagram Below Is for a Closed Economy Which Begins

question 124

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The diagram below is for a closed economy which begins in long-run equilibrium at Y* and The diagram below is for a closed economy which begins in long-run equilibrium at Y* and . FIGURE 31-3 -Refer to Figure 31-3.Suppose the government implements an expansionary fiscal policy,which increases the budget deficit.The economy's adjustment process returns real GDP to Y* in the long run.Since real GDP is not affected in the long run,how are future generations likely to be harmed by this government policy? A) Investment in public infrastructure has been crowded out,which will harm future generations. B) Private investment has been crowded out,which may lead to a lower future growth rate of potential GDP. C) The inflationary gap is harmful to the economy and reduces real GDP in the future. D) The budget deficit causes an appreciation in the domestic currency which reduces the income of future generations. E) Future generations are definitely not harmed by this policy. . The diagram below is for a closed economy which begins in long-run equilibrium at Y* and . FIGURE 31-3 -Refer to Figure 31-3.Suppose the government implements an expansionary fiscal policy,which increases the budget deficit.The economy's adjustment process returns real GDP to Y* in the long run.Since real GDP is not affected in the long run,how are future generations likely to be harmed by this government policy? A) Investment in public infrastructure has been crowded out,which will harm future generations. B) Private investment has been crowded out,which may lead to a lower future growth rate of potential GDP. C) The inflationary gap is harmful to the economy and reduces real GDP in the future. D) The budget deficit causes an appreciation in the domestic currency which reduces the income of future generations. E) Future generations are definitely not harmed by this policy. FIGURE 31-3
-Refer to Figure 31-3.Suppose the government implements an expansionary fiscal policy,which increases the budget deficit.The economy's adjustment process returns real GDP to Y* in the long run.Since real GDP is not affected in the long run,how are future generations likely to be harmed by this government policy?

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Management Object

An element or goal that management aims to achieve through planning, organizing, leading, and controlling organizational resources.

Frederick Taylor

A pioneer of industrial engineering and management science, best known for his work on improving industrial efficiency through the principles of scientific management.

Maximum Prosperity

The highest level of economic well-being and wealth generation achievable by an individual, organization, or economy.

Economic Gain

The increase in financial value or benefit that results from an investment or action.

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