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In Gagaland, Real GDP Is $200 Billion and Potential GDP

Question 28

Multiple Choice

In Gagaland, real GDP is $200 billion and potential GDP is $160 billion. Gagaland has a(n)


A) inflationary gap of $40 billion.
B) recessionary gap of $40 billion.
C) growth rate of 40 percent.
D) growth rate of 20 percent.
E) growth rate of -25 percent.

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