The Example of an Inflationary Gap in 2006-2007 Suggested That

question 178

Multiple Choice

The example of an inflationary gap in 2006-2007 suggested that the economy adjusts

• A)rapidly to inflationary gaps by lowering prices.
• B)rapidly to inflationary gaps by raising prices.
• C)slowly to inflationary gaps by lowering prices.
• D)slowly to inflationary gaps by increasing inflation.

---

Definitions:

Split-off Point

The stage in a process manufacturing where different products become recognizably separate and can be processed independently.

Raw Material Input

Raw material input refers to the basic materials and components used in the production process of goods.

Split-off Point

The stage in a production process where joint products can be recognized as distinct and separate entities.

Joint Costs

Costs incurred in producing or procuring two or more products at the same time, where those costs cannot be easily attributed to individual products.