When There Is an Inflationary Gap in the Economy,what Is

question 168

Multiple Choice

When there is an inflationary gap in the economy,what is occurring to real output in relation to the natural level of output?

• A)Real output exceeds the natural level of output.
• B)Real output is equal to the natural level of output.
• C)Real output may exceed or may be less than the natural level of output.
• D)Real output is less than the natural level of output.

---

Definitions:

Closing Entries

Transactions noted at the end of an accounting cycle for the purpose of transferring balances from temporary accounts to their permanent counterparts.

Closing Entries

Journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby resetting the temporary accounts for the next period.

Post-Closing Trial Balance

A listing of all balance sheet accounts with balances after closing entries are made, used to verify the equality of debits and credits.

Current Ratio

A financial metric comparing a company's current assets to its current liabilities to assess liquidity.