When the Macroeconomic Equilibrium Is Such That Real GDP Exceeds

question 278

Multiple Choice

When the macroeconomic equilibrium is such that real GDP exceeds potential real GDP, the economy is suffering from ________, and the government policy to eliminate this gap will ________ real GDP to ________ the price level.

• A)an inflationary gap; increase; increase
• B)a recessionary gap; decrease; decrease
• C)an inflationary gap; increase; decrease
• D)a recessionary gap; increase; decrease
• E)an inflationary gap; decrease; decrease

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Definitions:

Evidence

Information, facts, or data presented in support of an assertion, argument, or theory.

Premises

Statements or propositions that are assumed to be true and from which a conclusion is drawn in the process of reasoning.

Argument

A set of statements or reasons put forth to support a conclusion, often in the context of logic, debate, or philosophy.

Maximum Number

The highest value obtainable or permitted within a given set of numbers or constraints.