A Recessionary Gap Occurs When

question 297

Multiple Choice

A recessionary gap occurs when

• A) aggregate demand falls, but other things remain constant.
• B) short-run aggregate supply falls, but other things remain constant.
• C) the short-run equilibrium level of real GDP is greater than the level consistent with the long-run aggregate supply curve.
• D) the short-run equilibrium level of real GDP is less than the level consistent with the long-run aggregate supply curve.

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Definitions:

Individual Rights

The basic entitlements and freedoms that belong to every person, typically upheld by law and societal norms, including rights to privacy, speech, and equal treatment.

Poverty Rate

The percentage of the population whose income falls below the threshold deemed necessary to cover basic living costs, determining the level of poverty.

Poverty Line

A threshold level of income set by governments or organizations, below which individuals or families are considered to be living in poverty.

Distribution Of Income

The distribution of income is the way in which a country's total earnings are divided among its population, affecting economic inequality.