The Output Gap Is the Difference Between

question 8

Multiple Choice

The output gap is the difference between

• A)output demand and output supply.
• B)the market-clearing level of output and the actual level of output, Ym - Y*.
• C)the Bank of Canada's output target and the market-clearing level of output.
• D)nominal output and real output.
• E)current and future total factor productivity.

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Definitions:

Percentage Change

A mathematical calculation that depicts the degree of change over time, usually expressed as a percentage.

Break-Even

The point at which total costs and total revenue are equal, meaning there is no net loss or gain, and one has "broken even."

Monthly

Pertaining to or calculated for a period of one month.

Variable Expense

Expenses that fluctuate with changes in production volume or level of activity, similar to variable costs.