Suppose the Economy Is Currently Operating at Potential Output; a Recessionary

question 66

Multiple Choice

Suppose the economy is currently operating at potential output; a recessionary gap may be caused by each of the following EXCEPT:

• A) a negative demand shock.
• B) a positive inflation shock.
• C) an increase in taxes.
• D) a decrease in the money supply.

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Definitions:

Niacin

A water-soluble B vitamin (B3) that is essential for energy metabolism and the health of the nervous system, skin, and digestive system.

GERD

Gastroesophageal Reflux Disease, a chronic condition where stomach acid flows back into the esophagus, causing heartburn and other symptoms.

Stomach Acids

The digestive fluids secreted by the stomach’s lining, consisting mainly of hydrochloric acid, pepsin, and intrinsic factor, crucial for breaking down food and killing pathogens.

Esophagus

The muscular tube that connects the throat (pharynx) with the stomach; it's responsible for transporting food and liquids.