When the macroeconomic equilibrium is such that real GDP is less than potential real GDP, the economy is suffering from ________, and the government policy to eliminate this gap will ________ real GDP and ________ the price level
A) a recessionary gap; decrease; decrease
B) an inflationary gap; increase; decrease
C) a recessionary gap; increase; increase
D) an inflationary gap; decrease; increase
E) a recessionary gap; decrease; increase
C
Economics
You might also like to view...
Which of the following is correct?
a. The labor-force participation rate of women has increased in part due to smaller families. b. The labor-force participation rate of men has decreased in part due to men retiring younger and living longer. c. Both a and b are correct. d. Neither a nor b is correct.
Economics
Explain the probable incidence of a general sales tax imposed by a state
What will be an ideal response?
Economics