To Achieve Long-Run Equilibrium in an Economy with a Recessionary

question 19

Multiple Choice

To achieve long-run equilibrium in an economy with a recessionary gap,output will __________ and the inflation rate will _________.

• A) increase;increase
• B) increase;decrease
• C) increase;not change
• D) decrease;decrease
• E) decrease;increase

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Definitions:

Net Inflow

The difference between the total value of what enters a country, region, or market and the total value of what exits, typically measured over a specific period of time.

Cumulative Total Product

The total output produced by a firm after all units of inputs have been employed, illustrating the overall productivity.

Wage Rate

The amount of compensation paid to an employee by an employer in exchange for performing a job, usually expressed on an hourly, daily, or piecework basis.

Zinnia

A genus of plants within the sunflower tribe, known for their vibrant flowers and commonly grown in gardens for decorative purposes.