In a recessionary expenditure gap, the equilibrium level of real GDP is
A)less than planned aggregate expenditures.
B)greater than planned aggregate expenditures.
C)greater than full-employment GDP.
D)less than full-employment GDP.

Question

Quizplus · Accepted Answer

In a recessionary expenditure gap, the equilibrium level of real GDP is less than the full-employment GDP, indicating that the economy is not producing at its potential output level.

In a Recessionary Expenditure Gap, the Equilibrium Level of Real