An Expansionary Gap in the Short-Run Results In

question 37

Multiple Choice

An expansionary gap in the short-run results in:

• A)lower resource prices in the long run.
• B)unemployment in the long run.
• C)a recessionary gap in the long run.
• D)cost-push inflation in the long run.
• E)demand-pull inflation in the long run.

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Definitions:

Functional Fixedness

A cognitive bias that limits a person’s ability to use an object only in the way it is traditionally used.

Mental Set

A psychological tendency to approach situations in a certain way due to past experiences or habits, which can limit problem-solving abilities.

Unnecessary Constraints

Limitations or restrictions that are not required and can hinder creativity, progress, or the achievement of goals.

Processing Speed

The rate at which an individual can take in, assimilate, understand, and act on information.