A recessionary gap
A)Would cause a depletion of inventories.
B)Would occur if total output were less than aggregate demand.
C)Is the amount by which the rate of actual spending falls short of full-employment GDP.
D)Is the amount by which total spending exceeds GDP.

Question

Quizplus · Accepted Answer

A recessionary gap occurs when actual economic output is less than the potential output at full employment, meaning actual spending is below the level needed to achieve full-employment GDP.

A Recessionary Gap