The primary signal to policy makers that the economy has exceeded potential output is typically:
A)deflation.
B)stagflation.
C)inflation.
D)unemployment.

Question

Quizplus · Accepted Answer

When the economy exceeds its potential output, it typically leads to increased demand for goods and services, which can cause prices to rise, resulting in inflation. This is because the economy is operating at a level where demand outstrips supply, leading to upward pressure on prices.

The Primary Signal to Policy Makers That the Economy Has