Inflationary gaps can occur because Select one: Oa. Taxes cannot decrease enough to make people happy and close the gap Ob. wages are sticky in the short run c. wages are flexible but prices are high in the short run O d. wages are flexible but workers are never satisfied in both the long run and the short run
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Step 1: Inflationary gaps occur when the actual level of real GDP exceeds the potential level of real GDP, leading to upward pressure on prices. Show more…
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