The Economy Is in a Recessionary Gap,there Is Incomplete Crowding

question 56

Multiple Choice

The economy is in a recessionary gap,there is incomplete crowding out,and government implements expansionary fiscal policy.It follows that

• A) Real GDP will fall.
• B) the AD curve will shift to the right.
• C) the price level will fall.
• D) the recessionary gap will necessarily be completely eliminated.
• E) b and d

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Definitions:

P-value

The probability of observing test results at least as extreme as the results actually observed, under the assumption that the null hypothesis is correct.

Null Hypothesis

A statement used in statistical analysis that proposes there is no significant difference or effect, serving as the default assumption to be tested against an alternative hypothesis.

Economic Concerns

Issues or considerations related to the economy, including factors like inflation, unemployment, and fiscal policy.

Test Statistic

A calculated value from sample data used to make a decision about the validity of a hypothesis in statistical hypothesis testing.