Which of the Following, If True, Would Suggest That an Expansionary

Multiple Choice

Which of the following, if true, would suggest that an expansionary gap exists in an economy?

A) rapid inflation during a period when plant capacity utilization is below average
B) a steady price level coupled with a 5 percent unemployment rate
C) an unemployment rate below its natural rate and an unexpected increase in the consumer price index
D) sluggish growth in the rate of inflation and an exceptional increase in the Dow Jones average
E) a modest increase in the number of new unemployment claims and a lower-than-expected price level