If Short-Run Equilibrium Output Equals 20,000 and Potential Output (Y*)equals

question 38

Multiple Choice

If short-run equilibrium output equals 20,000 and potential output (Y*) equals 25,000, then this economy has a(n) ________ gap that can be closed by ________.

• A)recessionary; increasing taxes
• B)expansionary; increasing transfer payments
• C)expansionary; increasing government purchases
• D)recessionary; increasing government purchases

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Definitions:

Phenotype

The actual form, or constitution, of a person as determined by heredity and environmental factors.

Heredity

The passing of traits from parents to offspring through genes.

Pelvic Inflammatory Disease

An infection of the female reproductive organs, often caused by sexually transmitted infections, leading to severe health complications including infertility.

PID

Pelvic Inflammatory Disease, a condition affecting women characterized by infection and inflammation of the reproductive organs, often caused by sexually transmitted infections.