If Real GDP is less than Natural Real GDP,the economy is in
A) an inflationary gap.
B) a recessionary gap.
C) an unemployment gap.
D) a real gap.

Question

Quizplus · Accepted Answer

A recessionary gap occurs when Real GDP is less than Natural Real GDP, representing a situation where the economy is producing below its potential and has resources, such as labor, that are not being utilized effectively.

If Real GDP Is Less Than Natural Real GDP,the Economy