An Inflationary Gap Can Be Closed with

question 103

Multiple Choice

An inflationary gap can be closed with

• A)using an expansionary monetary policy.
• B)imposing price controls to prevent prices from rising.
• C)using a policy action such as a reduction in government purchases.

---

Definitions:

Highly Concentrated

Refers to a situation or market in which a few entities or businesses hold a large majority of market share or influence.

Market's Domination

A condition in which one or more firms hold a significant share of the total market sales, limiting competition and possibly leading to higher prices or lower quality for consumers.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power.

Inefficiencies

Inefficiencies refer to situations where resources are not used in the most effective way, leading to wasted potential in production, distribution, or allocation of goods and services.