An Inflationary Gap Occurs When

question 55

Multiple Choice

An inflationary gap occurs when

• A) real GDP is less than potential GDP.
• B) real GDP exceeds potential GDP.
• C) real GDP equals potential GDP.
• D) the economy is at full employment.

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Definitions:

Ratio

A numerical correlation that displays how frequently the first number encompasses the second, indicating the magnitude of one number in relation to another.

Ratio

A connection between two figures that shows how often the first figure includes the second one.

Ratio

A quantitative relationship between two numbers showing how many times the first number contains the second or is contained by it.

Ratio

A quantitative relationship between two numbers indicating how many times the first number contains the second.