If Potential Output Equals 10,000 and Short-Run Equilibrium Output Equals

question 24

Multiple Choice

If potential output equals 10,000 and short-run equilibrium output equals 8,500,there is a ______ gap and the Bank of Canada must ________ real interest rates in order to close the gap.

• A) recessionary;raise
• B) recessionary;lower
• C) recessionary;not change
• D) expansionary;raise
• E) expansionary;lower

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Definitions:

Bone Tissue

A dense, hard type of connective tissue that forms the skeletal structure of the body, providing support, protection, and enabling movement.

Osteocytes

Mature bone cells that maintain the bone matrix and communicate with other bone cells.

maintain bone

The process involving a balance of bone formation and bone resorption, necessary for healthy bone density and strength.

Macrophages

Immune cells that engulf and digest cellular debris, foreign substances, microbes, and cancer cells.