The recessionary GDP gap represents the
A)Amount by which aggregate demand must increase to reach full employment.
B)Value of the goods and services that could be produced but were not due to unemployed resources.
C)Leakages minus injections.
D)Amount by which actual investment differs from desired investment.

Question

Quizplus · Accepted Answer

The recessionary GDP gap measures the difference between potential GDP (the value of goods and services that could have been produced with unemployed resources) and actual GDP, which is lower due to the presence of unemployed resources.

The Recessionary GDP Gap Represents the