An Expansionary Gap Is Equal To

question 30

Multiple Choice

An expansionary gap is equal to:

• A)real GDP minus nominal GDP.
• B)nominal GDP minus real GDP.
• C)the actual short-run output minus potential output.
• D)the actual price level minus expected price level.
• E)the actual long-run real GDP minus actual short-run disposable income.

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Definitions:

Aggregate Supply Curve

A graphical representation showing the relationship between the total production of goods and services in an economy and the overall price level.

Price Index

An average that measures the change in prices paid by consumers for goods and services over time, indicating inflation or deflation.

GDP

Gross Domestic Product, a measure of the economic performance of a country, indicating the total value of all goods and services produced over a specific time period.

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, used to estimate inflation.