Multiple Choice
Starting from potential output, if firms become more optimistic and decide to increase their investment in new capital, then this will shift the ______ curve to the right and generate ______.
A) aggregate demand; a recessionary output gap
B) aggregate supply; a recessionary output gap
C) aggregate demand; an expansionary output gap
D) aggregate supply; an expansionary output gap
Correct Answer:
Verified
Correct Answer:
Verified
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