Solved

Starting from a Long-Run Equilibrium,a Reduction in Potential Output Leads

Question 203

Multiple Choice

Starting from a long-run equilibrium,a reduction in potential output leads to _________ gap in the short run and to ________ rates of inflation in the long run.


A) an expansionary;higher
B) an expansionary;lower
C) no output;higher
D) a recessionary;higher
E) a recessionary;lower

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q198: Some critics of the ADI-IA model have

Q199: It seems likely that if the inflation

Q200: When there is a recessionary gap,inflation will

Q201: Both the basic Keynesian model and the

Q202: An increase in taxes will most likely

Q204: If,for any given inflation rate,the Bank of

Q205: When an expansionary gap exists,actual output _

Q206: A horizontal line showing the current rate

Q207: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB3713/.jpg" alt=" -The economy pictured

Q208: An expected rise in the rate of