If policymakers do nothing in response to an inflationary gap, what will happen?

A. A rapid movement toward lower unemployment and higher inflation
B. A rapid movement toward lower unemployment and lower inflation
C. A slow movement toward higher unemployment and higher inflation
D. A slow movement toward lower unemployment and lower inflation


Answer: C

Economics

You might also like to view...

When the government's expenditures exceed its tax revenue, the budget

A) has a deficit and the national debt is increasing. B) is balanced and the national debt is increasing. C) has a surplus and the national debt is increasing. D) has a deficit and the national debt is decreasing. E) None of the above because by law the government's expenditures cannot exceed its tax revenue.

Economics

After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily

A) shifted inward, toward the origin. B) shifted outward, away from the origin. C) became flatter. D) became steeper.

Economics

As disposable income increases, _____

a. consumption and saving both increase b. consumption increases and saving decreases c. consumption and saving both decrease d. consumption decreases but saving increases e. saving increases, but we cannot predict what happens to consumption

Economics

If real disposable income fell during a particular year, we can conclude that:

a) personal taxes increased. b) inflation occurred. c) transfer payments declined. d) none of these necessarily occurred.

Economics