Q3. When the economy is at full capacity: A. The economy is at less than full potential employment, and inflation may rise B. The economy is at full potential GDP, and inflation may fall C. The economy is at less than full potential employment, and inflation could rise or fall. D. The economy is at full potential GDP, and infiation may rise 9. If output is greater that full potential (full employment) output: A) A recessionary gap may result B) An unemployment gap will result C) A deflationary gap may result D) An inflationary gap may result

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A: Unemployment will be at the natural rate --- is correct

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A: We are going to discuss Self adjustment mechanism using ADAS model to answer this question.

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Q: Which of the following events may lead to deflation? A. decrease in government spending during a…

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A: From the options, we havehigher, higherhigher, lowerlower, higherlower, lower

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