Assume Equilibrium Real GDP Per Year Is Equal to Full-Employment

question 77

Multiple Choice

Assume equilibrium real GDP per year is equal to full-employment real GDP. Which of the following will cause a recessionary gap?

• A) an increase in aggregate demand
• B) a reduction in aggregate demand
• C) a discovery of a new raw material
• D) a temporary reduction in the price of oil

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Definitions:

Office Supplies

Various everyday items used in offices for tasks such as writing, organization, and communication, including pens, paper, and staplers.

Petty Cash

A small amount of cash on hand used for covering minor expenses.

Cash Over and Short

An account that records the discrepancies between the expected cash count and the actual amount of cash received or paid out, indicating errors or theft.

Outstanding Checks

Checks that have been written and recorded in the checking account but have not yet been cashed or cleared by the bank.