An Inflationary Gap Exists When AD and SRAS

question 25

Multiple Choice

An inflationary gap exists when AD and SRAS

• A) fail to intersect.
• B) intersect to the right of Natural Real GDP.
• C) intersect to the left of Natural Real GDP.
• D) both have a positive slope.

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Definitions:

Stimulus-Response

The basic concept that a specific stimulus will elicit a specific, predictable response in an organism.

Associative

Relating to or involving connections between ideas, feelings, memories, or experiences.

Motivate Behavior

The process of encouraging or driving an individual to perform actions or engage in activities.

Drive

An internal motivational state that motivates behavior towards the attainment of certain goals or the fulfillment of needs.