Which of the Following Statements About Output Gaps Is True

question 12

Multiple Choice

Which of the following statements about output gaps is true?

• A)When actual GDP is above potential GDP, there is upward pressure on wages.
• B)When actual GDP is above potential GDP, there is downward pressure on output prices.
• C)When actual GDP is above potential GDP, there is downward pressure on wages.
• D)When actual GDP is below potential GDP, there is upward pressure on wages.
• E)When actual GDP is below potential GDP, there is upward pressure on output prices.

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