If an Expansionary Policy Pushes Output Beyond the Full Employment

question 319

Multiple Choice

If an expansionary policy pushes output beyond the full employment level of GDP:

• A) the economy will undergo deflation.
• B) the natural rate of unemployment will fall.
• C) costs of production will drop.
• D) the short-run aggregate supply will eventually shift to the left.

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Definitions:

Housing Prices

The monetary value attributed to residential dwellings, often influenced by location, size, amenities, and market conditions.

Monopolies

Market situations in which a single company or entity has exclusive control over the supply of a particular good or service.

Positive Profits

Financial gain experienced by a business when the total revenue exceeds the total costs and expenses incurred in producing goods or services.

Demand Fluctuates

Demand fluctuates refers to the constant variations in consumer desire for products or services, which can be influenced by factors like season, price, and trends.