The more the short-run output exceeds an economy's potential, _____.
a. the smaller the expansionary gap
b. the greater the upward pressure on the price level
c. the larger the recessionary gap
d. the greater the downward pressure on the price level
e. the lesser the demand for resources
Question 2
All other things constant, when the interest rate increases:
a. the demand for investment curve shifts to the right.
b. the demand for investment curve shifts to the left.
c. there is a movement downward along the demand for investment curve.
d. there is a movement upward along the demand for investment curve.
e. GDP increases.
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