If there is persistent inflation
A) long-run aggregate supply is growing at a faster rate than aggregate demand.
B) long-run aggregate supply is growing at a slower rate than aggregate demand.
C) there is an excess of total planned expenditures.
D) long-run aggregate supply is constant.
B
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The table below shows data for India's economy. Real GDP is measured in millions of rupees. Suppose that full employment occurs when real GDP is 27,000 million rupees
Price level Real GDP supplied in the short run Real GDP demanded a 114 23,501 35,898 b 120 25,355 32,341 c 125 27,670 27,670 d 131 30,366 18,569 e 138 33,164 15,898 The economy is experiencing ________ gap and firms will ________. A) an inflationary gap; increase production B) an inflationary gap; increase money wages paid to workers C) a recessionary gap; increase production D) a recessionary gap; decrease money wages paid to workers
When a person possesses a comparative advantage in the production of one good or service, it: a. means that the person's opportunity cost of producing that good or service is higher than for that of other goods. b. discourages specialization
c. promotes greater self-sufficiency. d. permits gains from trade to be realized due to a more efficient use of resources.