When the Economy Is Creating Less Output Than Its Potential

question 160

Multiple Choice

When the economy is creating less output than its potential, it means:

• A) there are some resources that are unemployed.
• B) the economy is in an economic boom.
• C) contractionary policy needs to be enacted.
• D) governments are likely to reduce their spending.

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Definitions:

Act of Settlement

A 1701 act passed by the Parliament of England that secured the Protestant succession to the throne and established restrictions on the powers of the monarchy.

Protestant Rule

The governance or dominant influence of Protestant denominations in a political or social context.

Cromwell

Refers to Oliver Cromwell, a key figure in British history who led the parliamentary forces in the English Civil War and later ruled as Lord Protector.

Ireland

An island in the North Atlantic, divided into the Republic of Ireland, an independent nation, and Northern Ireland, part of the United Kingdom.