Suppose the Economy Is Experiencing an Inflationary Gap in the Short

question 44

Multiple Choice

Suppose the economy is experiencing an inflationary gap in the short run. The advantage of using a contractionary fiscal policy rather than allowing the economy's natural adjustment process to operate is that

• A)it will reduce the downward pressure on the price level that would otherwise occur.
• B)if private- sector expenditures increase on their own, the policy will stabilize real GDP.
• C)it will shorten what might otherwise be a long recession.
• D)it will close the output gap.
• E)it will reduce the upward pressure on the price level that would otherwise occur.

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Definitions:

Reference Variables

Variables in Java that hold the memory address of objects rather than the actual object values themselves.

Integer Type

A data type in programming that represents integer numbers, without fractions, in various bits length based on the programming language.

Equals

A method that determines if two objects are equivalent in value or state, commonly found in various programming languages.

Class JFrame

A class in the Java Swing library used to create a window with a title bar, borders, and other controls.