The recessionary gap is the
A. amount of unemployment compensation required during a recession.
B. budget deficit encountered during a recession.
C. amount of government spending needed to end a recession.
D. distance between the equilibrium level of output and the full employment level of output.
Answer: D
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Between 1870 and 1910, corn and wheat
a. output showed little, if any, growth in land productivity. b. output increased dramatically, due to labor productivity increases. c. yields per acre hardly changed. d. output increased dramatically due to the effects of increased amounts of capital per worker. e. All of the above are correct.
The example of an inflationary gap in 2006–2007 suggested that the economy adjusts
A. rapidly to inflationary gaps by lowering prices. B. rapidly to inflationary gaps by raising prices. C. slowly to inflationary gaps by lowering prices. D. slowly to inflationary gaps by increasing inflation.