An Inflationary Output Gap Implies That

question 116

Multiple Choice

An inflationary output gap implies that

• A)the demand for all factor services will be relatively low.
• B)the intersection of AD and AS occurs at real GDP below potential output.
• C)the economy's resources are being used beyond their normal capacity.
• D)there is a pressure for wages to decrease.
• E)there is excess supply of most factors of production.

---

Definitions:

Environmental Conditions

The various physical and biological factors that influence the life and development of organisms, including climate, soil, and living beings in an area.

Mean Difference

A statistical measure that represents the average difference between two sets of data points.

Statistical Significance

A measure that indicates how likely a result obtained from a study or experiment is not due to chance.

Sampling Error

Difference between results derived from testing an entire group of events or individuals, and results derived from testing a subset of the group.