If the Economy Is Experiencing an Inflationary Gap in the Short

question 83

Multiple Choice

If the economy is experiencing an inflationary gap in the short run, an increase in the budget surplus

• A)will reduce the size of the inflationary gap.
• B)will increase the size of the inflationary gap.
• C)will cause an increase in inflation and increase aggregate supply.
• D)will increase aggregate demand and will increase the price level.

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Definitions:

Tradition

The transmission of customs or beliefs from generation to generation, or the fact of being long established.

Scapegoat

An individual or group unfairly blamed for problems or negative outcomes, often as a means of deflecting responsibility or criticism from others.

Mascot

A character or symbol used to represent a group, organization, or team, often meant to bring luck.

Advocate

is a person who publicly supports or recommends a particular cause or policy.