An Inflationary Gap Occurs When

question 275

Multiple Choice

An inflationary gap occurs when

• A) aggregate demand falls, but other things remain constant.
• B) short-run aggregate supply falls, but other things remain constant.
• C) the short-run equilibrium level of real GDP is greater than long-run aggregate supply.
• D) the short-run equilibrium level of real GDP is less than long-run aggregate supply.

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Definitions:

Cardiovascular

Relating to the circulatory system, which comprises the heart and blood vessels and is responsible for transporting nutrients, oxygen, and waste products throughout the body.

Urinary Systems

A group of organs in the body responsible for the production, storage, and elimination of urine, playing a critical role in the regulation of electrolytes and maintenance of blood pressure.

Blastula

Hollow, fluid-filled ball of cells occurring during animal development prior to gastrula formation.

Hollow Sphere

A structural formation, often found in biology, where a spherical cavity is surrounded by a wall or membrane.