An Inflationary Gap Exists When Consumers

question 134

Multiple Choice

An inflationary gap exists when consumers

• A)are saving more than businesses are investing.
• B)and businesses are purchasing less than the economy is capable of producing.
• C)and businesses are demanding more than the economy is capable of producing.
• D)and businesses are demanding less than the full employment level of output.

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Definitions:

Depth Cue

Visual or auditory information that helps to judge the distance or depth of objects in one's environment.

Closure

A psychological phenomenon that illustrates the human mind's propensity to perceive complete shapes even when information is missing.

Gestalt Principle

The Gestalt principle suggests that humans naturally perceive objects as organized patterns and unified wholes rather than as separate components.

Gestalt Principle

A theory in psychology proposing that people naturally organize their perceptions according to certain patterns or wholes, rather than focusing on individual components.