In 2009, actual output in the U.S. was 4.7 percent below the potential output. This implies that the:
a. unemployment in the U.S. was below its natural rate.
b. poverty level in the U.S. was below average.
c. there was a recessionary gap in this economy.
d. there was an expansionary gap in this economy.
e. there was an excess demand in this economy.
Question 2
If the short-run aggregate supply curve is positively sloped and the Fed increases the money supply, aggregate demand:
a. falls, which increases real GDP and the price level.
b. increases, which decreases real GDP and the price level.
c. falls, which decreases real GDP and increases the price level.
d. increases, which decreases real GDP and increases the price level.
e. increases, which increases real GDP and the price level.
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