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

question 8

Multiple Choice

For an economy starting at potential output,an increase 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) increase in cyclical unemployment.

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Definitions:

Right Shift

In programming, it refers to an operation that shifts the bits of a binary number to the right, effectively dividing the number by two. In politics, it refers to a move towards more conservative policies.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, allowing for competition on factors other than just price, such as branding and quality.

Economics

Social science that analyzes the choices people and governments make in allocating scarce resources.

Substitute Goods

Products or services that can serve as replacements for each other, satisfying similar customer needs or desires.