Does an Expansionary Gap or a Recessionary Gap Exist If

question 90

Multiple Choice

Does an expansionary gap or a recessionary gap exist if short-run output is $18.2 trillion and potential output is $18.0 trillion?

• A) an expansionary gap
• B) a recessionary gap
• C) both an expansionary gap and a recessionary gap
• D) neither an expansionary gap nor a recessionary gap
• E) The actual gap is equal to potential output.

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