Refer to Figure 11

question 9

Multiple Choice

Refer to Figure 11.3.Assume aggregate demand is represented by AD₁ and full-employment output is $5.6 trillion.The economy confronts an inflationary GDP gap of

• A)$200 billion.
• B)$400 billion.
• C)$600 billion.
• D)$800 billion.

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Definitions:

Same Day Value

Bank makes proceeds of cheques deposited available the same day before cheques clear.

Cheques Deposited

The process of placing cheques received into a bank account to be processed and the funds credited to the account holder.

Clear

To settle a trade or transaction by exchanging financial instruments or the legal process of resolving a dispute.

Zero Balance Accounts

Bank accounts that are maintained at a zero balance by automatically transferring funds from a master account in an exact amount only when checks are presented.