Multiple Choice
Assume an economy is currently in equilibrium with Real GDP at $716 billion.If potential Real GDP (LAS) is $627 billion,which of the following is true?
A) There is an inflationary gap of $89 billion.
B) There is an inflationary gap of 89 percent.
C) There is a recessionary gap of 89 percent.
D) There is a recessionary gap of $89 billion.
Correct Answer:
Verified
Correct Answer:
Verified
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