We Have an Inflationary Gap When

question 171

Multiple Choice

We have an inflationary gap when

• A)equilibrium GDP is greater than full employment GDP.
• B)full employment GDP is greater than equilibrium GDP.
• C)equilibrium GDP is equal to full employment GDP.
• D)None of the choices are correct.

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Definitions:

Deep Structure

In linguistics, the underlying syntactic structure or meaning of a sentence, as opposed to the surface structure which is how the sentence is expressed verbally.

Surface Structure

In linguistics, the term refers to the outward form of a sentence, which can vary without altering its deep structure or meaning.

Stroop Effect

A demonstration of cognitive interference where a delay in the reaction time of a task occurs due to a mismatch between the name of a color (e.g., "red," "blue") and the color it is printed in.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making, sometimes at the cost of accuracy or completeness.