An economy that is operating below its full-employment capacity is experiencing:
A)Say's Law.
B)unrealizable inflationary expectations.
C)Keynesian aggregate demand.
D)an inflationary gap.
E)a recessionary gap.

Question

Quizplus · Accepted Answer

An economy operating below its full-employment capacity is experiencing a recessionary gap, where actual output is less than potential output, leading to unemployment and underutilized resources.

An Economy That Is Operating Below Its Full-Employment Capacity Is