Author Question: A recessionary gap develops: a. when actual output exceeds potential output. b. when resource ... (Read 67 times)

vinney12 · **on:** Jun 30, 2018

A recessionary gap develops:
a. when actual output exceeds potential output.
b. when resource prices are sticky upward.
c. only when the economy is in recession.
d. only when GDP grows by more than 4 percent.
e. only when unemployment exceeds its natural rate.

Question 2

When the short-run aggregate supply curve is steep, then for a given increase in aggregate demand:
a. the increase in real GDP will be relatively small and the increase in the price level will be relatively large.
b. the increase in real GDP will be relatively large and the increase in the price level will be relatively small.
c. the increase in both real GDP and the price level will be large.
d. the increase in both real GDP and the price level will be small.
e. the decrease in real GDP will be larger than the decrease in the price level.