Multiple Choice
Assume an economy is currently in equilibrium with Real GDP at $500 billion.If potential Real GDP (LAS) is $400 billion,which of the following is true?
A) There is a recessionary gap of 100 percent.
B) There is a recessionary gap of $100 billion.
C) There is an inflationary gap of 100 percent.
D) There is an inflationary gap of $100 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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