3. When the economy is in a recession:a. taxreceipts decrease, transfer payments increase, andreal GDP increases.b. both tax receipts andunemployment insurance payments decrease.c.tax receipts increase but unemployment insurancepayments decrease. d. tax receipts decrease butunemployment insurance payments increase.e.both tax receipts and unemployment insurancepayments increase.4. Inflationary and recessionarygaps are closed by self-correcting adjustments thatshift:a. the SRAS curve.b. the LRAS curve.c. theAD curve.d. both the AD curve and LRAS curve.e.both the SRAS curve and the LRAS curve.

The recession refers to deficient demand in the economy, or demand that is not enough in the economy…

Answered: . When the economy is in a recession:a.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 25-4 45 Potential GDP Real GDP In Figure 25-4, which expenditure level will result in a recessionary gap? O There will be no deflationary gap. Real Expenditures
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. When the economy is in a recession:a. tax eceipts decrease, transfer payments increase, and al GDP increases.b. both tax receipts and nemployment insurance payments decrease.c.