Which of the Following If True Would Suggest That an Expansionary

question 59

Multiple Choice

Which of the following if true would suggest that an expansionary gap exists in an economy?

• A)Rapid inflation during a period when plant capacity utilization is below average​
• B)A steady price level coupled with a 5 percent unemployment rate
• C)An unemployment rate below its natural rate and an unexpected increase in the consumer price index
• D)Sluggish growth in the rate of inflation and an exceptional increase in the Dow Jones average
• E)A modest increase in the number of new unemployment claims and a lower than expected price level

---

Definitions:

Budgetary Process

A systematic method used by organizations or governments to allocate financial resources and plan for future financial needs.

Continuing Resolutions

Legislative measures used by the government to allow funding for its operations in the absence of an agreed-upon formal budget.

Biennial Budget

A budget or financial plan projected for two years, typically used by some state governments in the United States.

Federal Government Budget Process

The procedure through which the federal government creates a budget, involving proposals, reviews, and approvals by various branches of government.