Question

the phrase \too much money chasing too few goods\ best describes
the gdp gap.
cost - push inflation.
the inflation premium.
demand - pull inflation.
question 44
2 pts
the presence of discouraged workers
may cause the official unemployment rate to understate the true amount of unemployment.
may cause the official unemployment rate to overstate the true amount of unemployment.
increases the size of the labor force but does not affect the unemployment rate.
reduces the size of the labor force but does not affect the unemployment rate.

Explanation:

• For the first question:
• GDP gap: It is the difference between actual and potential GDP. Not related to "too much money chasing too few goods".
• Cost - push inflation: Caused by increased production costs (e.g., wages, raw materials). Not the case here.
• Inflation premium: A component of interest rates. Irrelevant.
• Demand - pull inflation: Occurs when aggregate demand exceeds aggregate supply (too much money chasing too few goods).
• For the second question:
• Discouraged workers: They are not actively seeking employment (so not counted in the labor force). If they were counted (as unemployed), the unemployment rate would be higher. So their presence understates the true unemployment rate.

Answer:

• First question: demand - pull inflation.
• Second question: may cause the official unemployment rate to understate the true amount of unemployment.