The Basic Keynesian Model Explains How an Increase in Planned

question 108

Multiple Choice

The basic Keynesian model explains how an increase in planned aggregate expenditure can cause a(n) ________ as producers increase production at preset prices to meet the higher demand and actual output ________ the potential output.

• A) recessionary gap;falls below
• B) expansionary gap;rises above
• C) expansionary gap;falls below
• D) recessionary gap;rises above
• E) expansionary gap;remains equal to

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