How Do We Define the Economy's Output Gap

question 144

Multiple Choice

How do we define the economy's output gap?

• A)the difference between actual GDP and potential GDP
• B)the level of total output that would be produced if capacity utilization is at its normal rate
• C)the difference between actual national income and desired aggregate expenditure
• D)the change in real GDP that results from economic growth
• E)the difference between nominal GDP and real GDP

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Definitions:

Legislative Enactments

Laws and statutes passed by a legislative body.

Cheque

A written, dated, and signed instrument that directs a bank to pay a specific sum of money to the bearer.

Honour

A quality that combines respect, being esteemed, and a sense of ethical conduct.

Bill of Exchange

A written, unconditional order by one party directing another party to pay a specified sum of money to a third party on demand or at a future date.