An Output Gap Occurs When

question 107

Multiple Choice

An output gap occurs when:

• A)Aggregate demand does not equal short-run aggregate supply
• B)Aggregate demand equals long-run aggregate supply
• C)Aggregate demand equals short-run aggregate supply but not long-run aggregate supply
• D)Short-run aggregate supply equals long-run aggregate supply

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Definitions:

Cost of Lumber

The expense associated with purchasing wood used for construction and manufacturing, which can vary based on supply and demand.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various price levels at a given point in time.

Supply

The total amount of a good or service available for purchase at any given price level within a defined market.

Income

The money received, especially on a regular basis, for work, through investments, or other sources.