Refer to the figure above. For an economy starting from the potential output a decrease in planned investment in the short run results in a

A. Recessionary output gap
B. Expansionary output gap
C. Increase in potential output
D. Decrease in potential output

Ans: A. Recessionary output gap

Economics

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When the economy is in long-run equilibrium, there will be

A) no unemployment. B) cyclical unemployment only. C) frictional and structural unemployment. D) cyclical and seasonal unemployment.

Economics

Trade surplus is the excess of exports over ________

A) capital outflows B) factor payments C) transfers D) imports

Economics