Which of the Following Would Be a Direct Result of Real

question 9

Multiple Choice

Which of the following would be a direct result of real GDP being above potential GDP?

• A)Firms would raise their prices and there would be a subsequent rise in inflation.
• B)Firms would lower their prices and there would be a subsequent decrease in inflation.
• C)Government spending would decline.
• D)None of the above would be a result.
• E)Real GDP can never be above potential GDP.

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Definitions:

Constructive Criticism

Feedback that is offered with the intention of helping someone improve, focusing on specific issues and suggesting ways to address them.

Resistant

Having the ability to withstand or oppose a particular force or effect, often used in the context of materials or organisms.

Encourage Flexibility

The act of promoting adaptability and openness to change in thoughts, actions, or plans.

Informal Standard

A guideline or practice that is widely adopted or recognized but not officially sanctioned.