The Amount by Which the Equilibrium Level of Real GDP

question 28

Multiple Choice

The amount by which the equilibrium level of real GDP exceeds the long-run equilibrium level as given by LRAS is referred to as

• A)a contractionary gap.
• B)economic growth.
• C)the amount by which taxes should be increased in order to put the brakes on run-away inflation.
• D)an inflationary gap.

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Definitions:

Coercive Power

a form of power that is based on the ability to deliver punishments or impose penalties for noncompliance with expectations or directives.

Reward Power

The capability of an individual to offer positive incentives, such as promotions or bonuses, to influence others’ behaviors or attitudes.

Expert Power

The influence and authority someone has due to their specialized knowledge or expertise.

Coercive Power

A form of power that is based on the ability to deliver punishments or impose sanctions on others.