A recessionary output gap is defined to be when:
A. equilibrium aggregate expenditure is below full employment GDP.
B. equilibrium aggregate expenditure is equal to full employment GDP.
C. equilibrium aggregate expenditure is above full employment GDP.
D. government spending is insufficient causing a gap in GDP.
A. equilibrium aggregate expenditure is below full employment GDP.
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Which of the following is likely to happen if the government lowers its expenditure?
A) Unemployment will increase. B) Consumption will increase. C) Price level will rise. D) Investment will increase.
A normal good is defined as a good
A) for which demand increases when income increases. B) with a downward sloping demand curve. C) for which demand increases when the number of demanders increases. D) for which demand increases when the price of a substitute rises. E) for which demand increases when the price of a complement falls.