In Figure 9

question 101

Multiple Choice

In Figure 9.9,at a full-employment output level of $150 billion,the gap by which actual aggregate income or GDP is different from full-employment income or GDP is

• A)An inflationary gap of $25 billion income.
• B)A recessionary gap of $50 billion income.
• C)An inflationary gap of $50 billion income.
• D)Expenditure equilibrium.

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Definitions:

Generalization

A broad statement or conclusion that applies to many instances, derived from specific cases.

Positive Instance

An item that belongs to a given class and possesses the trait attributed to the class by a given generalization.

Negative Instance

An item that belongs to a given class and does not possess the trait attributed to the class by a given generalization.

Inductive Generalization

A reasoning process that involves making broad generalizations based on specific observations.