A Deflationary Gap Occurs Because

Multiple Choice

A deflationary gap occurs because

A) Governments set full employment output at too high a level.
B) Prices in the economy are too low to ensure that all resources are fully utilized in the economy.
C) The level of expenditure in an economy is less than that needed to maintain full employment output.
D) Planned spending turns out to equal actual spending above full employment output
E) There are not enough resources in the economy to meet consumption requirements.