WebbQuestion 1(Multiple Choice Worth 2 points) (03.03 MC) Workers resist any decrease in wages; therefore, any general decrease in price is generally associated with a decrease … WebbConsider an economy facing a recessionary gap in the short-run. Expansionary fiscal policy leads to _____ while an economy’s self-correcting mechanism leads to _____ Question 39 …

Long Run Self Adjustment: Explanation StudySmarter

WebbIf real GDP < Potential real GDP (full employment GDP), then a recessionary gap exists.. Recessionary Gap Example. In this particular case, full employment results in $15 trillion … WebbA discretionary fiscal policy action to reduce inflation in the short run would be to increase taxes or decrease government spending. Assume that the marginal propensity to … java 独学 就职

7.3 Recessionary and Inflationary Gaps and Long-Run Macroeconomic

WebbFor an economy with a recessionary gap, unacceptably high levels of unemployment will persist for too long a time. For an economy with an inflationary gap, the increased prices … WebbOption (D) is correct. In AD-AS model, the short run equilibrium can occur at full employment level, above full employment level …. View the full answer. Transcribed … WebbIt must be noted that the effect of the recessionary gap is increasing unemployment. When the economy is in a downturn phase, the demand for goods and services decreases as unemployment rises. In this situation, … java 独学