A Contractionary Gap Is

question 18

Multiple Choice

A contractionary gap is

• A)the difference between aggregate supply and aggregate demand.
• B)the amount of unwanted inventory accumulation.
• C)the amount by which taxes should be increased in order to put the brakes on run-away inflation.
• D)the amount by which the equilibrium level of real GDP is less than the long-run equilibrium level as given by LRAS.

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