Recessionary Gap or Inflationary Gap?

Question 1

Assume the economy is at QY and consumers start saving more than they spend.

Accepted Answer

Recessionary Gap

Question 2

Assume the economy is at QY and Congress cuts the military budget.

Accepted Answer

Recessionary Gap

Question 3

Assume the economy is at QY and the price of oil doubles.

Accepted Answer

Recessionary Gap

Question 4

Assume the economy is at QY. If Congress decides to cut taxes, what gap will exist?

Accepted Answer

Inflationary Gap

Question 5

Assume the economy is at QY businesses anticipate rapid inflation.

Accepted Answer

Recessionary Gap

Question 6

Assume the economy is at QY and Congress passes laws tightening banking regulations.

Accepted Answer

Recessionary Gap

Question 7

Assume the economy is at QY and there is a major outbreak of H1N1 killing thousands.

Accepted Answer

Recessionary Gap

Question 8

Assume the economy is at QY and Congress raises taxes.

Accepted Answer

Recessionary Gap

Question 9

Assume the economy is at QY & incomes for Germans, French, & Chinese rise, while USA's doesn't.

Accepted Answer

Inflationary Gap

Question 10

Assume the economy is at QY and the stock market drops 7 weeks in a row.

Accepted Answer

Recessionary Gap

Questions 10