An Inflationary Output Gap Occurs When

question 34

Multiple Choice

An inflationary output gap occurs when

• A)actual GDP exceeds potential GDP.
• B)nominal GDP exceeds real GDP.
• C)demand for labour services is very low.
• D)equilibrium national income is below potential national income.
• E)potential GDP exceeds actual GDP.

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Definitions:

Common Stock

Equity ownership in a corporation, giving shareholders voting rights and a share in the company's profits, usually through dividends.

Financing Activities

Transactions and events where cash is raised for the business through borrowing or issuing equity, reflected in the cash flow statement.

Cash Flows

The movement of money into and out of a business, indicating the company's ability to generate cash from operations, investments, and financing activities.

Operating Activities

Day-to-day actions that a company takes in conducting its business, such as selling products, managing costs, and paying wages.