Which One of the Following Could Cause an Inflationary Gap

question 25

Multiple Choice

Which one of the following could cause an inflationary gap?

• A)Net exports are decreasing.
• B)Price levels are too low.
• C)Government spending is too high.
• D)Unemployment occurs.

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Definitions:

Free-Ride

To benefit from a resource, good, or service without providing fair compensation or contribution.

Cable TV

A system of delivering television programming through coaxial or fiber-optic cables directly to subscribers' premises.

Club Good

A type of good that is excludable but non-rivalrous, meaning people can be prevented from using it, but one person's use does not reduce its availability to others.

Common Resources

Resources that are not owned by anyone, cannot be easily limited, and are available for use by more than one person or group.