An Inflationary Gap Can Be Closed with

question 38

Multiple Choice

An inflationary gap can be closed with

• A) using an expansionary monetary policy.
• B) using a policy action such as a reduction in taxes.
• C) using a policy action such as a reduction in government purchases.
• D) imposing price controls to prevent prices from rising.

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Definitions:

Form Of Business Organization

The legal structure adopted by a business, such as sole proprietorship, partnership, corporation, or limited liability company (LLC).

Corporation

A legal entity owned by shareholders, with rights and responsibilities separate from those of its owners, and capable of engaging in transactions, owning assets, and being liable for debts.

Working Capital Management

The process of managing a company's short-term assets and liabilities to ensure it has sufficient liquidity to run its day-to-day operations.

Cash Requirements

Cash requirements refer to the total amount of cash a company needs to satisfy its operational expenses and financial obligations in a given period.