A recessionary gap is the amount that autonomous aggregate expenditures must rise to cause the equilibrium level of real GDP to shift to the full-employment level of real GDP.

Question

Quizplus · Accepted Answer

A recessionary gap occurs when actual GDP is less than potential GDP, indicating underutilized resources. Increasing autonomous aggregate expenditures can help close this gap by boosting demand and moving GDP towards full employment.

A Recessionary Gap Is the Amount That Autonomous Aggregate Expenditures