If Actual Output Exceeds Potential Output, the Economy

question 21

Multiple Choice

If actual output exceeds potential output, the economy:

• A)is experiencing an inflationary gap.
• B)is experiencing a recessionary gap.
• C)may be in a long-run equilibrium but is not in a short-run equilibrium.
• D)is in neither a short-run nor long-run equilibrium.

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Definitions:

Compliance

The act of adhering to rules, standards, or laws set by governments or regulatory authorities.

Community Standards

Accepted norms and values that are recognized and upheld by a group or society.

Ethical Decision Making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.

Consumers

Individuals or entities that purchase goods or services for personal use as opposed to resale or commercial purposes.