When the output gap is positive, it represents_{--------------------} gap, and when it is negative, it represents _{--------------------}Gap. A)an inflationary; a recessionary B)an employment; an unemployment C)an inflationary; an employment D)a recessionary; an inflationary E)None of the above answers is correct.

Question

Quizplus · Accepted Answer

A positive output gap indicates that actual economic output is above potential output, often leading to inflationary pressures. A negative output gap indicates that actual output is below potential output, often associated with recessionary conditions.

When the Output Gap Is Positive, It Represents-------------------- Gap, and When

When the Output Gap Is Positive, It Represents_{--------------------} Gap, and When