Multiple Choice
Suppose the economy is initially in a long-run macroeconomic equilibrium.A shock then hits the economy and we observe that the unemployment rate increases and the price level decreases.We can conclude that ________ has decreased and there is now a(n) ________ gap.
A) aggregate supply; inflationary
B) aggregate demand; recessionary
C) aggregate supply; recessionary
D) aggregate demand; inflationary
Correct Answer:
Verified
Correct Answer:
Verified
Q116: An inflationary output gap implies that<br>A)the demand
Q117: Automatic fiscal stabilizers are most helpful in<br>A)making
Q118: In the basic AD/AS macro model,the "paradox
Q119: The diagram below shows an AD/AS model
Q120: If the economy in the short run
Q122: What is the focus of study in
Q123: Which of the following is occurring when
Q124: What is sometimes called the "long-run aggregate
Q125: "Automatic fiscal stabilization" in the economy refers
Q126: Consider a simple macro model with demand-determined