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    Principles of Economics Study Set 1
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    Exam 25: Spending and Output in the Short Run
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    For an Economy Starting at Potential Output, a Decrease in Planned
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For an Economy Starting at Potential Output, a Decrease in Planned

Question 95

Question 95

Multiple Choice

For an economy starting at potential output, a decrease in planned investment in the short run results in a(n) :


A) expansionary output gap.
B) recessionary output gap.
C) increase in potential output.
D) decrease in potential output.

Correct Answer:

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