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1.) A recessionary gap is a result of a) Government deficit. b) Inadequate aggre

ID: 1151537 • Letter: 1

Question

1.) A recessionary gap is a result of

a) Government deficit.

b) Inadequate aggregate demand.

c) Too much expenditures.

d) Both a and b.

2.) An inflationary gap is a result of

a) Government deficit.

b) Inadequate aggregate demand.

c) Too much expenditures.

d) Both a and b.

3.) Everything else constant, inflation

a) Leads to an increase in a country’s net exports.

b) Leads to a reduction in a country’s net exports.

c) Increases the inventories below the desired level.

d) b and c.

e) a and c.

4.) Everything else constant, inflation

a) Leads to an increase in a country’s exports.

b) Leads to a reduction in a country’s imports.

c) Increases the inventories above the desired level.

d) b and c.

e) none.

Explanation / Answer

1.The correct answer is B.

2. The correct answer is C.

3. The correct answer is B.

4. The correct answer is D.