Question 25 (1 point) What occurs when spending is above the potential GDP level? O a) expansionary gap O b) inflationary gap O c) recessionary gap O d) depressionary gap Question 26 (1 point) Refer to the graph shown below. At point A: Inflation A C B Unemployment O unemployment is higher than point B and C unemployment is lower than point B and C unemployment is higher than point B but lower than C unemployment is highest Question 27 (1 point) From a neoclassical view, which of the following is less important? O level of potential GDP C encouraging more productivity per worker O fighting unemployment O encouraging long-term growthQuestion 30 (1 point) Investment is defined as spending by: O a) investors in the stock market. b) households on home maintenance. c) business that adds to the productive capacity of the economy. O d) investors in the bond market.Question 34 (1 point) Which of the following government policies would be supported by neoclassical macroeconomic assumptions? O focus on short-term recession and controlling inflation O focus on GDP and cyclical unemployment O focus on combating depression and cyclical unemployment focus on long-term growth and on controlling inflationQuestion 37 (1 point) Which of the following did classical economists believe would happen if the product markets accrued surpluses? O a) Wage rates would fall. O b) Prices would rise. O c) The government would fix things. O d) Interest rates would risc. Question 38 (1 point) Suppose that a rise in business confidence has led to more investment in the economy and higher levels of output. In the short-run Keynesian analysis, the rise in aggregate demand will: O cause government to lower taxes. O cause government to increase spending. lower unemployment. exports will drop