Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Econ 102—Chapter 24 Review February 25, 2008 1. When actual GDP is higher than potential GDP, we say that there is a(n) ______________ gap. Draw a graphical example of this gap below. 2. When actual GDP is higher less than potential GDP we say there is a(n) ______________ gap. Draw a graphical example of this gap below. 3. An inflationary gap leads to excess demand for labor, which causes wages and thus ________ costs to rise. Firms require higher ____________ in order to supply any level of output, and so the AS curve shifts _____________. 4. A recessionary gap leads to excess supply of labor, which causes wages and thus ________ costs to fall. Firms reduce __________ for any level of output supplied, and so the AS curve shifts __________. 5. The downward adjustment in of wages in response to a recessionary gap is much ____________ than the upward adjustment of wages in response to an ______________ gap. Economists refer to this phenomenon as _________________.