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

- Using Figure 9.9,and assuming the full-employment output level is $50 billion,
A)There is an inflationary gap of $50 billion income.
B)There is a recessionary gap of $50 billion income.
C)There is an inflationary gap of $25 billion income.
D)The economy is at macro equilibrium.

Question

Use the following figure to  answer the questions : Figure9.9
 
- Using Figure 9.9,and assuming the full-employment output level is $50 billion,
A)There is an inflationary gap of $50 billion income. 
B)There is a recessionary gap of $50 billion income. 
C)There is an inflationary gap of $25 billion income. 
D)The economy is at macro equilibrium.

Quizplus · Accepted Answer

The full-employment output level is $50 billion, but the actual output level is only $25 billion. This means that there is an inflationary gap of $25 billion.

Use the Following Figure to Answer the Questions