The recessionary gap is given by the difference between potential GDP and real GDP.

Name: The recessionary gap is given by the difference between potential GDP and real GDP.
Brand: Quizplus
Rating: 4.8 (51 reviews)

Question

Quizplus · Accepted Answer

The recessionary gap is actually the difference between potential GDP and actual or current GDP, not real GDP. Real GDP is already adjusted for inflation, while potential GDP is the maximum output an economy can produce with its existing resources and technology.

The Recessionary Gap Is Given by the Difference Between Potential