A Recessionary Gap Implies That

question 72

Multiple Choice

A recessionary gap implies that

• A)Aggregate demand is less than aggregate supply at the full-employment price level.
• B)The unemployment rate is falling.
• C)Aggregate demand exceeds aggregate supply at the full-employment price level.
• D)Inventories are being depleted faster than producers desire.

---

Definitions:

Principles

Fundamental truths or propositions that serve as the foundation for a system of belief or behavior or for a chain of reasoning.

Behavioral Predictions

The process of forecasting individual or group behaviors based on past actions, trends, or patterns.

Overconfidence

The tendency to hold too strong a belief in one's own abilities, judgments, or predictions, often leading to errors or mistakes.

Common Sense

Practical judgment concerning everyday matters, or a basic ability to perceive, understand, and judge in a manner that is shared by nearly all people.