An Inflationary Gap Exists When Consumers and Businesses Are Demanding

question 199

True/False

An inflationary gap exists when consumers and businesses are demanding more output than the economy is capable of producing at full employment.

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Definitions:

Marginal Profit

The rise in earnings achieved by selling an extra unit of a product or service.

Market Price

The current price at which an asset or service can be bought or sold in a marketplace.

Competitive

A state of being in which entities vie against each other to achieve a goal, such as market dominance or winning a contest.

Profit-Maximizing

The process or strategy of adjusting operations and resources to achieve the highest possible profit.