An Inflationary Gap Is

question 14

Multiple Choice

An inflationary gap is

• A)the difference between aggregate supply and aggregate demand.
• B)the amount of unwanted inventory accumulation.
• C)the amount by which taxes should be increased in order to put the brakes on run-away inflation.
• D)the amount by which the equilibrium level of real GDP exceeds the long-run equilibrium level as given by LRAS.

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Definitions:

Episodic Memory

The retention of information about the where, when, and what of life’s happenings—that is, how individuals remember life’s episodes.

Central Executive

A component of working memory in cognitive psychology that controls and regulates cognitive processes, directing attention and managing tasks.

Working Memory

A cognitive system with a limited capacity, responsible for temporarily holding information available for processing and decision-making.

Short-Term Memory

The part of the memory system where information is stored for a short duration, typically a few seconds to a minute.