Answer:
The correct answer is option A.
Explanation:
According to the mainstream business cycle theory, the potential GDP grows at a steady rate while the aggregate demand grows at a fluctuating rate. The money wage rate is considered to be sticky.
So when aggregate demand increases more than the potential GDP, the supply is not able to increase as much as demand. This creates an inflationary gap in the economy.
B. Finance a car. If they need to use one yearly, then it would be best to finance one and pay it off over time
The answer would be : A. dollar cost averaging
Dollar-cost averaging technique is a long-term technique to buy a fixed dollar amount of a particular investment, regardless of it's market price fluctuation. Since we invest in a fixed amount investment, the investment will eventually lead to profit, ( though it may take a longer time than those who affected by market's fluctuation)
