If the economy is above full employment,there is ________ gap,and as the economy adjusts toward full employment,the price level ________.
A)an inflationary;rises
B)an inflationary;falls
C)a recessionary;rises
D)a recessionary;falls
E)an inflationary;does not change

Question

Quizplus · Accepted Answer

When the economy is above full employment, there is an inflationary gap because there is excess demand for goods and services, leading to upward pressure on prices. As the economy adjusts toward full employment, the price level rises to bring demand in line with supply.

If the Economy Is Above Full Employment,there Is ________ Gap,and