If,at the Short-Run Equilibrium,an Expansionary Gap Exists,the

question 155

Multiple Choice

If,at the short-run equilibrium,an expansionary gap exists,the

• A) IA line will move upward until actual output equals potential output.
• B) IA line will move downward until actual output equals potential output.
• C) LRAS line will move upward until actual output equals potential output.
• D) LRAS line will move downward until actual output equals potential output.
• E) LRAS line and IA line will move downward until actual output equals potential output.

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Definitions:

Flood

An overflow of a large amount of water beyond its normal limits, especially over what is normally dry land.

Insurance

A financial product designed to protect against the risk of financial losses, both big and small, that result from damage to the insured or property, or liability for damage or injury caused to a third party.

Wealth

The abundance of valuable resources, assets, or material possessions an individual or entity controls.

Utility Function

Describes the relationship between the consumption of goods and the resulting level of satisfaction or utility for an individual.