A recessionary gap implies that
A. Aggregate demand exceeds aggregate supply at the full-employment price level.
B. Inventories are being depleted faster than producers desire.
C. The unemployment rate is falling.
D. Aggregate demand is less than aggregate supply at the full-employment price level.
Answer: D
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Indicate whether the statement is true or false
Which of the following would decrease the size of a federal budget deficit?
a. a recession b. an increase in defense spending c. growth in real GDP d. a decrease in tax revenues e. an increase in transfer payments
the multiplier effect does not occur when autonomous expenditure decreases
a. true b. false
If the reserve ratio is designated by "r," the amount of deposits a bank can lend out is equal to [D × (1 - r)].
Answer the following statement true (T) or false (F)