Multiple Choice
If potential output equals 8,000 and short-run equilibrium output equals 8,500,there is a(n) ______ gap and the Bank of Canada must _______ real interest rates in order to close the gap.
A) recessionary;raise
B) recessionary;lower
C) recessionary;not change
D) expansionary;raise
E) expansionary;lower
Correct Answer:
Verified
Correct Answer:
Verified
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