When an Economy's Actual Output Is Greater Than Its Potential

question 161

Multiple Choice

When an economy's actual output is greater than its potential at some point in time, we say that it is experiencing:

• A) a positive output gap.
• B) a negative output gap.
• C) inflation.
• D) deflation.

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Definitions:

Regulator

An entity or mechanism that controls, directs, or adjusts the operation of a system or processes to maintain stability or compliance.

Processor

An electronic component or computer hardware that interprets and executes instructions, powering the operation of computers and other devices.

Self-Analysis

The process of examining one's thoughts, feelings, and actions to gain insight into oneself, often used for personal development or therapeutic purposes.

Adaptive Efforts

Actions or behaviors individuals or systems engage in to adjust to changes or challenges in their environment.