When real GDP is greater than potential GDP, there is_{--------------------}which leads the inflation rate to_{--------------------} . A)a recessionary gap; fall B)an inflationary gap; fall C)an inflationary gap; rise D)a recessionary gap; rise E)a recessionary gap; remain stable

Question

Quizplus · Accepted Answer

When real GDP exceeds potential GDP, it indicates an inflationary gap, which typically leads to an increase in the inflation rate due to higher demand and pressure on resources.

When Real GDP Is Greater Than Potential GDP, There Is--------------------which

When Real GDP Is Greater Than Potential GDP, There Is_{--------------------}which