A recessionary gap is the amount by which aggregate expenditures ____ the amount required to achieve full-employment equilibrium GDP.
A) exceed
B) equal
C) fall short of
D) are greater than

Question

Quizplus · Accepted Answer

A recessionary gap occurs when aggregate expenditures fall short of the amount required to achieve full-employment equilibrium GDP. In other words, there is a gap between the actual level of output and the potential level of output that can be produced if all resources are utilized.

A Recessionary Gap Is the Amount by Which Aggregate Expenditures