For an Economy Starting at Potential Output,a Decrease in Autonomous

question 106

Multiple Choice

For an economy starting at potential output,a decrease in autonomous planned aggregate expenditure 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.
• E) decrease in cyclical unemployment.

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Definitions:

P-to-O Expectancies

The belief in the probability that particular efforts will lead to desired outcomes, often related to work motivation and performance.

Employee Motivation

The extent of passion, engagement, and inventive effort that a company's employees put into their tasks.

Performance Accurately

The precise and correct execution or accomplishment of a task or duty as required.

Expectancy Theory

A motivation theory stating that an individual's willingness to exert effort is a function of the expected outcome of the effort, the value of that outcome, and the perceived likelihood that the effort will lead to the expected outcome.