In an Inflationary Gap

question 148

Multiple Choice

In an inflationary gap:

• A) aggregate output is above potential output.
• B) aggregate output equals potential output.
• C) aggregate output is less than potential output.
• D) short-run flexibility will bring the economy back to its potential output without any intervention.

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Definitions:

OCD

Obsessive-Compulsive Disorder, a mental health disorder characterized by unwanted repetitive thoughts (obsessions) and behaviors (compulsions).

Hallucinations

Experience of sensing things while awake that appear to be real but instead have been created by the mind.

Sensations

Feelings or perceptions resulting from something that happens to or comes into contact with the body.

SAD

Seasonal Affective Disorder, a type of depression that occurs at a particular time of the year, usually in winter.