Starting from Potential Output, If Firms Become Less Optimistic About

question 30

Multiple Choice

Starting from potential output, if firms become less optimistic about the future and decide to decrease their investment in new capital, then this will generate a(n) ________ gap and inflation will ________.

• A)recessionary; increase
• B)recessionary; decrease
• C)expansionary; decrease
• D)expansionary; increase

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Definitions:

Medieval Europe

A period in European history from the 5th to the 15th century, characterized by feudalism, the manorial system, and the predominance of the Catholic Church.

Christianity

A monotheistic religion based on the life and teachings of Jesus Christ, emphasizing salvation through faith, the Trinity, and the scripture of the Bible.

Older People

Individuals typically characterized by an advanced age, often defined legally or socially as people who are at or beyond the retirement age in their society.

Religious Services

Ceremonies or rituals conducted in honor or worship of a divine entity or entities, often held in dedicated spaces like churches, mosques, or temples.