Which of the Following Is Evidence of an Inflationary Gap

question 119

Multiple Choice

Which of the following is evidence of an inflationary gap?

• A)very long lines at employment agencies 
• B)very short waiting times for product delivery 
• C)very low sales figures 
• D)very long search times for people looking for jobs 
• E)very low unemployment rates

---

Definitions:

Effective Interest Rate

The realized return on a bond or loan, taking into account the effect of compounding interest as opposed to the nominal rate.

Amortization

The process of spreading out a loan or intangible asset cost over its useful life, thereby reducing it on the balance sheet over time.

Journal Entry

A recording of a transaction or adjustment in the accounting ledger that includes the accounts and amounts to be debited and credited.

Bonds Payable

Long-term debt securities issued by corporations or governments, promising to pay the holder a specified amount of interest and to repay the principal at maturity.