A Recessionary Output Gap Implies That

question 104

Multiple Choice

A recessionary output gap implies that

• A)the demand for all factor services will be relatively low.
• B)the intersection of AD and AS occurs where real GDP exceeds potential output.
• C)the economy's resources are being used at more than their normal capacity.
• D)there is upward pressure on wages.
• E)there is excess demand for most factors of production.

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Definitions:

Linear Perspective

A technique in art and photography that creates the illusion of depth and volume on a flat surface by depicting objects smaller as their distance from the observer increases.

Texture Gradient

Texture gradient is a depth cue in visual perception in which the surface texture of an object becomes denser and finer as distance from the viewer increases.

Autokinetic Illusion

A visual perception phenomenon where a static light in a dark room appears to move because of small involuntary eye movements.

Tiny

A term used to describe something that is very small in size.