A) a positive GDP gap.
B) a negative GDP gap.
C) inﬂation.
D) an adverse supply shock.

Name: A) a positive GDP gap. B) a negative GDP gap. C) inﬂation. D) an adverse supply shock.
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Question

A) a positive GDP gap. 
B) a negative GDP gap. 
C) inﬂation. 
D) an adverse supply shock.

Quizplus · Accepted Answer

A negative GDP gap indicates that the actual GDP is lower than the potential GDP, which suggests that the economy is not performing at full capacity and there is a recessionary gap.

A) a Positive GDP Gap