Recessionary Gap or Inflationary Gap?

Question 1

Assume the economy is at QY and Congress raises taxes.

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 businesses anticipate rapid inflation.

Accepted Answer

Recessionary Gap

Question 4

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

Accepted Answer

Recessionary Gap

Question 5

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

Accepted Answer

Inflationary Gap

Question 6

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

Accepted Answer

Recessionary Gap

Question 7

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

Accepted Answer

Recessionary Gap

Question 8

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

Accepted Answer

Inflationary Gap

Question 9

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

Accepted Answer

Recessionary Gap

Question 10

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

Accepted Answer

Recessionary Gap

Questions 10