Use the following figure to answer the questions : Figure9.9

-In Figure 9.9,at a full-employment output level of $150 billion,the gap by which actual aggregate income or GDP is different from full-employment income or GDP is
A)An inflationary gap of $25 billion income.
B)A recessionary gap of $50 billion income.
C)An inflationary gap of $50 billion income.
D)Expenditure equilibrium.

Question

Use the following figure to  answer the questions : Figure9.9
 
-In Figure 9.9,at a full-employment output level of $150 billion,the gap by which actual aggregate income or GDP is different from full-employment income or GDP is
A)An inflationary gap of $25 billion income. 
B)A recessionary gap of $50 billion income. 
C)An inflationary gap of $50 billion income. 
D)Expenditure equilibrium.

Quizplus · Accepted Answer

At a full-employment output level of $150 billion, the actual aggregate income or GDP is $100 billion, which is $50 billion lower than the full-employment income or GDP. This difference is known as a recessionary gap.

Use the Following Figure to Answer the Questions