When No Output Gap Exists,actual Output _________ Potential Output and the Rate

question 5

Multiple Choice

When no output gap exists,actual output _________ potential output and the rate of inflation will tend to __________.

• A) is greater than;increase
• B) is greater than;decrease
• C) equals;remain the same
• D) is less than;increase
• E) is less than;decrease

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Definitions:

Simplify

The process of altering an expression to make it easier to understand or work with, often by reducing it to its simplest form.

Simplify

The process of reducing an expression to its simplest form, making it easier to understand or solve.

\(8^x\cdot 8^{x-1}\)

An expression that can be simplified to \(8^{2x-1}\) using the properties of exponents.

\(10,000(1.07)^{4t}\)

An exponential growth equation, where \(10,000\) is the initial quantity and \(1.07\) is the growth factor applied every period \(t\), scaled by a factor of 4.