-Use Table 10

question 4

Multiple Choice

-Use Table 10.3,which shows the relationship between consumption and income.Assume the price level is constant. If full-employment income were $400 billion per year in Table 10.3,

• A)There would be an inflationary gap.
• B)Full-employment income would equal equilibrium income.
• C)There would be a recessionary gap.
• D)Further information is needed to determine equilibrium income.

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Definitions:

Goods in Process Inventory

Items that are currently in the production process and have not yet reached the finished goods status in a manufacturing company.