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What happens when the economy is in an inflationary gap? The money wage rate______ and real GDP OA. falls; decreases OB. rises; decreases C. falls; increases D. rises; increases

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter9: Demand-side Equilibrium: Unemployment Or Inflation?

Section: Chapter Questions

Problem 3DQ

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Question

What happens when the economy is in an inflationary gap?
The money wage rate
and real GDP
OA. falls; decreases
OB. rises; decreases
OC. falls; increases
OD. rises; increases

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