When the Inflationary Gap Is Finally Eliminated, a Long-Run Equilibrium

question 31

Multiple Choice

When the inflationary gap is finally eliminated, a long-run equilibrium is established with a ____ price level and with GDP ____ potential GDP.

• A)higher; equal to
• B)higher; greater than
• C)lower; equal to
• D)lower; greater than

---

Definitions:

Goodwill

The positive reputation and intangible asset of a business, derived from customer perception, relationships, and loyalty.

Normative

pertaining to norms, standards, or what is considered typical, ideal, or should be the case, often within a moral or ethical context.

Informative

Intended to provide new knowledge or data to the audience, often utilized in educational and professional contexts.

Informative

Intended to provide information or knowledge to the audience without necessarily aiming to persuade.