Exhibit 11-2 -In Exhibit 11-2, an expansionary gap would be represented by the distance A)Y₂ - Y₁ B)Y₃ - Y₁ C)Y₂ - Y₃ D)P₃ - P₁ E)P₂ - P₃

Question

Quizplus · Accepted Answer

An expansionary gap occurs when actual output is greater than potential output. In the exhibit, the distance between the vertical line at Y₁ and the vertical line at Y₃ represents the excess amount of output produced beyond potential output, indicating an expansionary gap.

Exhibit 11-2 -In Exhibit 11-2, an Expansionary Gap Would Be Represented by Be