An Inflationary Gap Occurs When

question 275

Multiple Choice

An inflationary gap occurs when

• A) aggregate demand falls, but other things remain constant.
• B) short-run aggregate supply falls, but other things remain constant.
• C) the short-run equilibrium level of real GDP is greater than long-run aggregate supply.
• D) the short-run equilibrium level of real GDP is less than long-run aggregate supply.

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Definitions:

Simultaneously Monitor

To observe or check multiple inputs, conditions, or systems at the same time, often requiring divided attention or multitasking capability.

Dual Processing

The principle that information is often simultaneously processed on separate conscious and unconscious tracks.

Shape

The external form, contour, or structure of an object, defined by its outline or surface configuration.

Conscious Information Processing

The deliberate, effortful, and aware manipulation and analysis of information in the mind, typically involving attention and working memory.