The Amount of Additional Aggregate Demand Needed to Achieve Full

question 132

Multiple Choice

The amount of additional aggregate demand needed to achieve full employment after allowing for price level changes is

• A)The AD shortfall.
• B)The AD excess.
• C)The recessionary GDP gap.
• D)The inflationary GDP gap.

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Definitions:

Inefficient Industry

A sector of the economy where resources are not optimally used, often leading to wasted efforts, higher production costs, and reduced competitiveness.

Cross-Border Flow

The movement of goods, services, capital, and people across national boundaries.

Financial Markets

Marketplaces where people trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand.

Financialization

The increasing importance and dominance of financial markets, financial motives, financial institutions, and financial elites in the economy.