The business cycle occurs because A. the government is constantly trying to produce an inflationary gap, but expenditures in the economy cannot keep pace with the government's agenda B. aggregate demand and short-run aggregate supply fluctuate, but the money wage rate does not adjust quickly enough to keep real GDP at potential GDP C. potential GDP is increasing, and increases in aggregate demand cannot keep pace with increases in long-run aggregate supply D. the Bank of Canada is constantly increasing the quantity of money.
The business cycle occurs because A. the government is constantly trying to produce an inflationary gap, but expenditures in the economy cannot keep pace with the government's agenda B. aggregate demand and short-run aggregate supply fluctuate, but the money wage rate does not adjust quickly enough to keep real GDP at potential GDP C. potential GDP is increasing, and increases in aggregate demand cannot keep pace with increases in long-run aggregate supply D. the Bank of Canada is constantly increasing the quantity of money.
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter16: The Influence Of Monetary And Fiscal Policy On Aggregate Demand
Section: Chapter Questions
Problem 5PA
Related questions
Question
100%
The business cycle occurs because
A. the government is constantly trying to produce an inflationary gap, but expenditures in the economy cannot keep pace with the government's agenda
B. aggregate demand and short-run
C. potential GDP is increasing, and increases in aggregate demand cannot keep pace with increases in long-run aggregate supply
D. the Bank of Canada is constantly increasing the quantity of money.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Brief Principles of Macroeconomics (MindTap Cours…
Economics
ISBN:
9781337091985
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:
9781337617383
Author:
Roger A. Arnold
Publisher:
Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:
9780078747663
Author:
McGraw-Hill
Publisher:
Glencoe/McGraw-Hill School Pub Co