Assume an Economy Is Currently in Equilibrium with Real GDP

question 103

Multiple Choice

Assume an economy is currently in equilibrium with Real GDP at $716 billion.If potential Real GDP (LAS) is $627 billion,which of the following is true?

• A)There is an inflationary gap of $89 billion.
• B)There is an inflationary gap of 89 percent.
• C)There is a recessionary gap of 89 percent.
• D)There is a recessionary gap of $89 billion.

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Definitions:

Ideology

A system of ideas, beliefs, and values, especially one that forms the basis of economic or political theory and policy.

Individualist

A person who prioritizes personal goals and independence over collective goals and conformity.

Personal Enjoyment

The pleasure or satisfaction an individual derives from activities or experiences, driven by personal preference and interest.

Masculinity/Femininity

Societal attributes, behaviors, and roles associated with being male or female, highlighting the distinctions and expectations placed upon genders.