Does an expansionary gap or a recessionary gap exist if short-run output is $20.0 trillion and potential output is $21.0 trillion?
What will be an ideal response?
a recessionary gap
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When a market is in disequilibrium, such as when the quantity supplied of a good is greater than the quantity demanded of that good, the price of the good will rise, ceteris paribus
Indicate whether the statement is true or false
A higher domestic interest rate leads to ______.
a. depreciation in the value of the dollar b. appreciation in the value of the dollar c. less foreign investment in the U.S. d. less U.S. purchasing of foreign products
The money multiplier is approximated as being equal to:
A. demand deposits multiplied by the reserve ratio. B. one divided by the federal funds. C. demand deposits multiplied by the interest rate. D. one divided by the reserve ratio.
Which of the following is a disadvantage of the corporate form of business organization?
A. double taxation B. limited financing C. limited liability D. unlimited liability