When Actual Output Exceeds Potential Output, There Is ______ Output

question 90

Multiple Choice

When actual output exceeds potential output, there is ______ output gap and the inflation rate will ____.

• A)an expansionary; exceed the expected rate of inflation
• B)an expansionary; be lower than the expected rate of inflation
• C)no; be equal to the expected rate of inflation
• D)a recessionary; exceed the expected rate of inflation

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Definitions:

Troubled Debt Restructuring

A process where terms of a debt are modified due to financial difficulties of the borrower, often involving concessions by the lender.

Continuation

The process of extending or carrying on an activity without interruption.

Undiscounted Sum

The total of all future cash flows associated with an investment or project without adjusting them for their present value.

Discounted

The method of calculating the current value of a future sum of money or series of cash flows using a particular return rate.