Which of the following occurs when the spending on final goods and services exceeds full-employment GDP?
A)Inventory accumulation.
B)Unemployment.
C)Inflationary gap.
D)Recessionary gap.

Question

Quizplus · Accepted Answer

When the spending on final goods and services exceeds full-employment GDP, it creates an inflationary gap. This is because the demand for goods and services exceeds the supply, leading to an increase in prices.

Which of the Following Occurs When the Spending on Final