An Inflationary Output Gap Is Characterized by

question 24

Multiple Choice

An inflationary output gap is characterized by

• A)constant prices.
• B)real GDP falling below potential output.
• C)falling prices.
• D)real GDP exceeding potential output.
• E)real output that varies one- for- one with aggregate demand.

---

Definitions:

Kitchen Equipment

Tools and appliances used in a kitchen for the preparation and cooking of food.

Implicit and Explicit Costs

Implicit costs are indirect, non-monetary expenses related to the use of resources owned by the business, while explicit costs are direct, monetary payments for resources not owned by the firm.

Accounting Profit

The financial gain calculated by subtracting total explicit costs from total revenue, representing the net income reported on a company's financial statements.

Explicit Costs

Direct, out-of-pocket payments for expenses incurred in conducting business, such as rent, salaries, and materials.