The GDP gap measures the difference between
A) NDP and GDP.
B) NI and PI.
C) actual GDP and potential GDP.
D) nominal GDP and real GDP.

Question

Quizplus · Accepted Answer

The GDP gap measures the difference between actual GDP (the value of goods and services produced in an economy in a given time period) and potential GDP (the maximum level of output that an economy can sustain over the long term without generating inflation). This gap indicates how much an economy is underperforming or overperforming compared to its potential.

The GDP Gap Measures the Difference Between