An Economy Currently Has an Inflationary Gap

question 301

Multiple Choice

An economy currently has an inflationary gap. An increase in the money wage rate will ________ the inflationary gap and ________ the price level.

• A) decrease; decrease
• B) increase; increase
• C) increase; decrease
• D) decrease; increase

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Definitions:

Inattention

A lack of focus or difficulty concentrating on tasks at hand, which can be symptomatic of various mental or psychological disorders.

Impulsivity

The tendency to act on urges and desires spontaneously and without adequate thought to the consequences.

Hyperactivity

Excessive activity or movements that can be symptomatic of psychological conditions like ADHD.

Severe and Persistent Mental Illness

A term used to describe long-lasting and major mental health conditions that significantly impair an individual's functioning.