The Figure Above Shows a Nation's Aggregate Demand Curve,aggregate Supply

question 144

Multiple Choice

The figure above shows a nation's aggregate demand curve,aggregate supply curve,and potential GDP.
-In the figure above,the ________ gap is one trillion dollars.To close the gap,the government can change expenditure by ________ one trillion dollars.

• A)recessionary;less than
• B)inflationary;exactly
• C)inflationary;more than
• D)recessionary;more than
• E)recessionary;exactly

---

Definitions:

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made when the other party has reasonably relied on that promise to their detriment.

Statute of Frauds

A legal principle requiring certain types of contracts to be in writing and signed to be enforceable.

Oral Contract

A verbal agreement between parties that is legally binding, though more difficult to enforce than written contracts due to the lack of physical evidence.

Voidable

A transaction or agreement that is legally valid but may be annulled or voided at the discretion of one of the parties involved.