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Which of the following most likely occurs when an inflationary gap exists? Multiple Choice Producers will use overtime shifts

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Answer: Producers will use overtime shifts and strain capacity.

An inflationary gap essentially means that there's too much money chasing too few goods/resources and this causes an increase in price level. To profit from this increased price level and meet the demand, producers will attempt to increase production by any means possible, i.e. overtime shifts and over utilising resources.

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