The table below shows data for India?s economy. Real GDP is measured in millions of rupees. $$\begin{array} { | l | l | l | l | }
\hline & \text { Price level } & \begin{array} { l }
\text { Real GDP } \
\text { supplied in the short } \
\text { run }
\end{array} & \text { Real GDP demanded } \
\hline \text { a } & 114 & 23,501 & 35,898 \
\hline \text { b } & 120 & 25,355 & 32,341 \
\hline \text { c } & 125 & 27,670 & 27,670 \
\hline \text { d } & 131 & 30,366 & 18,569 \
\hline \text { e } & 138 & 33,164 & 15,898 \
\hline
\end{array}$$ If potential GDP in India is ___________million rupees, India is experiencing___________ .
A) 28,500; an above full-employment gap
B) 30,000; a potential GDP gap
C) 26,500; an inflationary gap
D) 26,500; a recessionary gap

Question

The table below shows data for India?s economy. Real GDP is measured in millions of rupees. $$\begin{array} { | l | l | l | l | } 
\hline & \text { Price level } & \begin{array} { l } 
\text { Real GDP } \
\text { supplied in the short } \
\text { run }
\end{array} & \text { Real GDP demanded } \
\hline \text { a } & 114 & 23,501 & 35,898 \
\hline \text { b } & 120 & 25,355 & 32,341 \
\hline \text { c } & 125 & 27,670 & 27,670 \
\hline \text { d } & 131 & 30,366 & 18,569 \
\hline \text { e } & 138 & 33,164 & 15,898 \
\hline
\end{array}$$ If potential GDP in India is ___________million rupees, India is experiencing___________ .
A) 28,500; an above full-employment gap
B) 30,000; a potential GDP gap
C) 26,500; an inflationary gap
D) 26,500; a recessionary gap

Quizplus · Accepted Answer

At a price level of 125, the real GDP supplied equals the real GDP demanded at 27,670 million rupees. If potential GDP is 26,500 million rupees, the economy is producing more than its potential, indicating an inflationary gap.

The Table Below Shows Data for India?s Economy If Potential GDP in India Is ___________Million Rupees, India Is