The GDP gap is the difference between:
A) frictional unemployment and actual real GDP.
B) unemployment rate and real GDP deflator.
C) actual real GDP and full-employment real GDP .
D) full-employment real GDP and real GDP deflator.

Question

Quizplus · Accepted Answer

The GDP gap is the difference between actual real GDP and full-employment real GDP. Full-employment real GDP represents the potential output of an economy when it is operating at full employment, with all available resources being used efficiently. The GDP gap measures the amount of output that is not being produced due to underemployment of labor and other resources.

The GDP Gap Is the Difference Between