When an Economy's Actual Output Differs from Its Potential at Some

question 136

Multiple Choice

When an economy's actual output differs from its potential at some point in time, we say that it is experiencing:

• A) an output gap.
• B) a recession.
• C) a boom.
• D) an inflationary gap.

---

Definitions:

Adjusting Entries

Journal entries made in accounting to allocate income and expenses to the period in which they actually occurred.