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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, an Increase in Planned
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For an Economy Starting at Potential Output, an Increase in Planned

Question 63

Question 63

Multiple Choice

For an economy starting at potential output, an increase 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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