The Inflationary GDP Gap Differs from the AD Excess When

question 7

Multiple Choice

The inflationary GDP gap differs from the AD excess when

• A)The aggregate supply curve slopes upward.
• B)The multiplier effect raises spending.
• C)The aggregate supply curve is horizontal.
• D)There is a time lag in the implementation of fiscal policy.

---

Definitions:

Inter-product Cannibalization

Occurs when a company's new product eats into the sales of one of its older products, potentially reducing overall sales and profits.

Substitute Product

A product that can be used in place of another product, satisfying the same consumer needs or wants.

LRMC

Long-Run Marginal Cost, which refers to the additional cost of producing one more unit of a good or service when all inputs are variable in the long term.

Increase Traffic

Refers to the actions and strategies deployed to attract more visitors or users to a website, online platform, or physical location.