An Inflationary Gap Will Exist When

question 190

Multiple Choice

An inflationary gap will exist when

• A)aggregate demand grows more slowly than aggregate supply.
• B)there is downward pressure on prices.
• C)expenditures are not equal to aggregate demand.
• D)equilibrium GDP is greater than full employment GDP.

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Definitions:

Insurance Expense

The cost recognized in accounting for premiums paid on insurance policies, which protect the company's assets or activities.

Annual Income Statement

A financial statement that summarizes the revenues, costs, and expenses incurred over a fiscal year, showing the company's annual profit or loss.

Legal Fees Earned

Income recognized by law firms or attorneys for the provision of legal services.

Unearned Rent

Revenue received by a landlord for rent that has not yet been earned because the time period the rent covers has not yet passed.