What Is the Price of Beer Without Trade in Northern

question 75

Multiple Choice

What is the price of beer without trade in Northern Ireland?

• A)2 bottles of whiskey = 3 kegs of beer
• B)5 bottles of whiskey = 12 kegs of beer
• C)3 bottles of whiskey = 1 keg of beer

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Definitions:

Recessionary Gap

The difference between the actual output of an economy and its potential output, occurring when the economy is underperforming.

Expansionary Gap

A situation where the actual output in an economy exceeds the potential output, often leading to inflation.

Cost-Push Inflation

Cost-push inflation is caused by an increase in the prices of production inputs like labour and raw materials, leading to decreased supply and increased cost of finished goods.

Potential Output

This refers to the maximum output an economy can produce without leading to inflation, assuming all resources are fully utilized.