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The maximum quantity that an economy can produce, given its existing levels of labor, physical capital, technology, and institutions, is called:When prices of outputs in an economy become sufficiently high causing production to exceedpotential GDP, the resulting:The __________________ in an AD/AS diagram is most relevant to Keynes’s Law.The ____________ describes a situation where sufficient credit is available, but the economy experiences a reduction in consumption and investment.
Due to inflationary pressures, the national income of households has been spread across a higher overall price base for goods and services. How will this affect be shown in an AD/ASAD/AS model?When the aggregate demand curves slope downwards because the price of a good increases, people will Substitute and buy other goods instead.In an AD/AS model, the point where the economy has excess capacity is called the:When the economy is in a recession, the government will want to increase output. If the multiplier equals 2.5 and the government increases spending by 200, how much will output increase by?