An Inflationary Output Gap Would Generate Which of the Following

question 132

Multiple Choice

An inflationary output gap would generate which of the following conditions in the economy?

• A)Firms are making low profits.
• B)Workers have relatively more bargaining power with employers.
• C)There is an unusually small demand for labour.
• D)There is downward pressure on wages.
• E)There is much idle capacity.

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Definitions:

Basilar Membrane

A structural element within the cochlea of the inner ear that plays a critical role in sound perception by vibrating in response to sound waves, thus contributing to the mechanical processes that convert sound into neural signals.

Oval Window

A membrane-covered opening that leads from the middle ear to the inner ear, playing a crucial role in the process of hearing.

Photoreceptors

Specialized cells in the retina of the eye that respond to light, enabling vision.

Retina

A layer of tissue located at the back of the eye, containing cells that are sensitive to light and trigger nerve impulses that pass via the optic nerve to the brain.