Which of the Following Statements About the GDP Gap Is

question 111

Multiple Choice

Which of the following statements about the GDP gap is not true?

• A)It widens during recessions and narrows during expansions.
• B)When the GDP gap equals zero, the economy operates on its production possibilities curve.
• C)It is a measure of output lost as a result of unemployment.
• D)There are more goods and services available as the gap widens.
• E)It is equal to potential real GDP minus actual real GDP.

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