Suppose That an Economy Is Experiencing an Expansionary Gap

question 28

Multiple Choice

Suppose that an economy is experiencing an expansionary gap.And suppose the economy is adjusting to potential GDP through a rising price level and a falling output level.Which of the following best illustrates how the adjustment of GDP is being achieved?  

• A) An active approach to correcting a recessionary gap is being used. 
• B) An active approach to correcting an expansionary gap is being used. 
• C) A passive approach to correcting a recessionary gap is being used. 
• D) A passive approach to correcting an expansionary gap is being used.

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Definitions:

Focusing Attention

The mental process of concentrating on one element, task, or thought while ignoring other distractions or stimuli.

Middle Childhood

a developmental stage that includes children from approximately 6 to 12 years of age, characterized by significant growth in social, cognitive, and physical areas.

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The developmental period that extends from birth to about 18 to 24 months.

Body Image

An individual's perception, thoughts, and feelings about their own body's appearance.