An "inflationary expenditure gap" is the amount by which:
A)equilibrium GDP falls short of the full-employment GDP.
B)aggregate expenditures exceed those just necessary to achieve full-employment GDP.
C)saving exceeds investment at the full-employment GDP.
D)aggregate expenditures are less than the full-employment GDP.

Question

Quizplus · Accepted Answer

An inflationary expenditure gap occurs when aggregate expenditures exceed those necessary to achieve full-employment GDP. This results in an increase in demand for goods and services, which can lead to an increase in prices and inflation.

An "Inflationary Expenditure Gap" Is the Amount by Which