In a Self-Regulating Economy,inflationary and Recessionary Gaps

question 76

Multiple Choice

In a self-regulating economy,inflationary and recessionary gaps

• A) never occur.
• B) are eliminated by forces internal to the economy,without government intervention.
• C) are eliminated by timely actions of government policymakers.
• D) are the desirable results of microeconomic price adjustments.

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Definitions:

Real Terms

Refers to economic indicators or values that have been adjusted for inflation, allowing for the comparison of quantities as if prices had not changed over time.

Deposits

Funds placed into an account at a financial institution for safekeeping, which may earn interest over time depending on the account type.

Coupon Bond

A type of bond that pays the holder a fixed interest rate (coupon) periodically until the maturity date, at which point the principal amount is repaid.

Yield To Maturity

The total return expected on a bond if it is held until the maturity date.