The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms. TABLE 19-1 Refer to Table 19-1.What is the output gap in 2013?
A)$408 billion
B)$411 billion
C)$7.1 billion
D)$3 billion
E)-$3 billion

Question

The table below provides macroeconomic data for a hypothetical economy.Dollar amounts are all in constant-dollar terms.  TABLE 19-1 Refer to Table 19-1.What is the output gap in 2013?
A)$408 billion 
B)$411 billion 
C)$7.1 billion 
D)$3 billion 
E)-$3 billion

Quizplus · Accepted Answer

The output gap is calculated as potential GDP minus actual GDP. In 2013, potential GDP is given as $2,150 billion and actual GDP is given as $2,147 billion. Therefore, the output gap is -$3 billion, indicating that the economy is currently producing below its potential level of output.

The Table Below Provides Macroeconomic Data for a Hypothetical Economy