Which of the following most likely occurs when an inflationary gap exists?
A)A bidding war for available goods and services.
B)More layoffs.
C)Rising inventories.
D)Excessive saving.

Question

Quizplus · Accepted Answer

When an inflationary gap exists, there is an increase in aggregate demand and a shortage of available goods and services. This creates a bidding war between consumers, driving up prices and causing inflation.

Which of the Following Most Likely Occurs When an Inflationary