If the Economy Is in an Inflationary Gap, Which of the Following

question 180

Multiple Choice

If the economy is in an inflationary gap, which of the following is the least appropriate policy mix?

• A)A budget surplus and expansionary monetary policy
• B)A budget deficit and expansionary monetary policy
• C)A budget deficit and contractionary monetary policy
• D)A budget surplus and contractionary monetary policy

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Definitions:

Gymnast

An athlete who performs artistic gymnastics, demonstrating strength, flexibility, balance, and control in various routines.

Dichotomous Thinking Style

A cognitive pattern where situations or individuals are viewed in two categories (e.g., good or bad) without acknowledging the complexity.

Self-evaluations

Processes in which individuals assess their own skills, attributes, and performance, often in comparison to standards or prior performance.

Serotonin

A neurotransmitter in the brain that plays a key role in mood regulation, appetite, digestion, and sleep.