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A recessionary gap occurs when Select one: O A. high rates of inflation occur. O B. nominal GDP is less than potential GDP. O C.

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A recessionary gap occurs when Select one: O A. high rates of inflation occur. O B. nominal GDP is less than potential GDP. O C. nominal GDP is greater than potential GDP. O D. real GDP is less than potential GDP. Real GDP (dollars) Investment (dollars) 500 3,000 4,000 5,000 6,000 7,000 8,000 Consumption expenditure (dollars) 2,500 3,250 4,000 4,750 5,500 6,250 Government expenditure (dollars) 500 500 500 500 500 500 500 500 500 500 500 In the above table, there are no taxes (so that that real GDP equals disposable income) and no imports or exports. If real GDP decreases from $6,000 to $5,000, the marginal propensity to consume is Select one: O a. 0.75 O b.-750 O 0.80. O d.-0.75

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