The Table Below Shows Data for Five Economies of Similar

question 45

Multiple Choice

The table below shows data for five economies of similar size.Real GDP is measured in billions of dollars.Assume that potential output for each economy is $340 billion.
TABLE 24-1
-Refer to Table 24-1.Which of the following statements best describes the situation facing Economy B?

• A)There is a recessionary gap of $40 billion and wages are falling slowly.
• B)There is an inflationary gap of $40 billion and wages are rising.
• C)There is a recessionary gap of $20 billion and wages are falling slowly.
• D)There is no output gap and wages are stable.
• E)There is an output gap of $20 billion and wages are rapidly adjusting.

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Definitions:

Thoracic Vertebra

One of the twelve vertebrae located in the mid-upper back, part of the spinal column that supports the thoracic (chest) region.

Sinus

A cavity within the bones or tissues, often referring to those in the nasal area that are lined with mucous membranes.

Cavities

Dental decay resulting in holes in the teeth.

Bones

The rigid organs that constitute part of the endoskeleton of vertebrates, providing structure and protection and assisting in movement.