If the economy is in equilibrium with real GDP less than potential GDP, there is ________ gap, and a fiscal policy that ________ is appropriate
A) a recessionary; decreases aggregate demand
B) an inflationary; increases aggregate demand
C) a recessionary; increases aggregate demand
D) an inflationary; decreases aggregate demand
E) a recessionary; increases potential GDP
C
Economics
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If there is a change in the U.S. endowment of factors of production, then there would be
A) shifts in just SRAS. B) a movement along the SRAS curve. C) a shift in both LRAS and SRAS. D) a shift in just LRAS.
Economics
For this question, assume that the Fed is expected to respond to any event by keeping output constant (i.e., equal to its initial level). An unexpected increase in government spending will cause
A) stock prices to fall. B) stock prices to rise. C) no change in stock prices. D) an ambiguous effect on stock prices.
Economics