An economy is at full employment. Which of the following events can create a recessionary gap?
A. an increase in foreign income
B. an increase in taxes
C. a decrease in the quantity of capital
D. a decrease in money wages
Answer:B
An economy is at full employment. Which of the following events can create a recessionary gap?
A. an increase in foreign income B. an increase in taxes C. a decrease in the quantity of capital D. a decrease in money wages