Ch.9 Flashcards
(4 cards)
1
Q
Say’s Law
A
Supply creates its own demand. Production creates enough demand to purchase all the goods and services produced.
2
Q
Inflationary gap
A
The condition in which the Real GDP that the economy is producing is less than the Natural Real GDP and the unemployment rate is greater than the natural unemployment rate.
3
Q
Laissez-faire
A
The condition in which the Real GDP that the economy is producing is greater than the Natural Real GDP and the unemployment rate is less than the natural unemployment rate.
4
Q
recessionary gap
A
A public policy of not interfering with market activities in the economy.
