Suppose That an Economy Is in an Inflationary Gap in the Short

question 146

Multiple Choice

Suppose that an economy is in an inflationary gap in the short run. In the long run:

• A) the economy's self-correcting mechanism will restore GDP to its potential level.
• B) inflation will spiral unless the government takes dramatic fiscal measures.
• C) sustained inflation will reduce the value of money.
• D) fiscal and monetary policies may lower prices, but output will remain higher than potential level.

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Definitions:

Functionalist Approach

A theoretical perspective in sociology that views society as a complex system whose parts work together to promote stability and integration.

Social Structure

The organized pattern of social relationships and social institutions that together compose society.

Deviance

Behaviors or actions that deviate from societal norms, values, or expectations, potentially leading to social sanctions.

Conflict Perspective

A sociological viewpoint that emphasizes the role of power and coercion in producing social order, often focusing on the conflicts between different social classes or groups.