The amount by which aggregate spending at full employment exceeds full employment output is known as the:
A. Inflationary gap.
B. Recessionary gap.
C. Deflationary gap.
D. Multiplier effect.
E. Crowding out.
Ans: A. Inflationary gap.
You might also like to view...
Describe the relationship illustrated by the Laffer curve
What will be an ideal response?
The opportunity cost of the financial resources used to finance the purchase of capital is
A) the price of the capital goods purchased. B) the real interest rate. C) the quantity of investment demanded. D) the supply of investment. E) capital investment.
Of the following, the largest source of revenue for the federal government is the
A) personal income tax. B) transfers from state and local governments. C) corporation income tax. D) lottery. E) revenue from the sale of public lands.
Which of the following does NOT occur if Home starts a policy of permanent fiscal expansion:
A) Home's exchange rate increases. B) Foreign's interest rate rises. C) Home output rises. D) Foreign output rises. E) Current Account Balance increases.