For an Economy Starting at Potential Output, an Increase in Planned

question 63

Multiple Choice

For an economy starting at potential output, an increase in planned investment in the short run results in a(n) :

• A)expansionary output gap.
• B)recessionary output gap.
• C)increase in potential output.
• D)decrease in potential output.

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Definitions:

Developing Countries

Nations with a lower level of industrialization, lower living standards, and lower Human Development Index (HDI) compared to developed countries.

OPEC

The Organization of the Petroleum Exporting Countries, an intergovernmental organization coordinating the petroleum policies of its member countries.

Global Supplies

The total availability of goods, commodities, or resources considered at a global scale, affecting markets, economies, and international trade.

Net Energy Ratio

indicates the balance between the amount of energy produced by a system and the energy required to create and maintain it.