An Inflationary Output Gap Implies That

question 47

Multiple Choice

An inflationary output gap implies that

• A)the demand for all factor services will be relatively low.
• B)there is excess supply of most factors of production .
• C)there is a pressure for wages to decrease.
• D)the economy's resources are being used beyond their normal capacity.
• E)the intersection of AD and AS occurs at real GDP below potential output.

---

Definitions:

Photovoltaic Cell

A device that converts sunlight directly into electricity through the photovoltaic effect, widely used in solar panels for renewable energy generation.

Power Stations

Facilities where electricity is generated from various energy sources and then distributed to the grid.

Wind Farm

An area equipped with a large number of wind turbines used for generating electricity through wind power, representing a renewable and clean energy source.

Migratory Birds

Birds that travel from one place to another at regular times often over long distances, typically for breeding or weather-related reasons.