Refer to the following table. What was the approximate output gap in 1997?
$$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Real GDP } \
\text { (trillions of \$) }
\end{array} & \begin{array} { c }
\text { Potential GDP } \
\text { (trillions of \$) }
\end{array} \
\hline 1995 & 3.20 & 3.30 \
\hline 1996 & 3.45 & 3.65 \
\hline 1997 & 3.75 & 3.89 \
\hline 1998 & 4.05 & 4.10 \
\hline 1999 & 4.38 & 4.30 \
\hline
\end{array}$$

Question

Refer to the following table. What was the approximate output gap in 1997?
$$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP } \
\text { (trillions of \$) }
\end{array} & \begin{array} { c } 
\text { Potential GDP } \
\text { (trillions of \$) }
\end{array} \
\hline 1995 & 3.20 & 3.30 \
\hline 1996 & 3.45 & 3.65 \
\hline 1997 & 3.75 & 3.89 \
\hline 1998 & 4.05 & 4.10 \
\hline 1999 & 4.38 & 4.30 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The output gap can be calculated by subtracting the potential GDP from the actual GDP, and then dividing that number by the potential GDP. In 1997, the actual GDP was $820 billion and the potential GDP was estimated to be $847 billion. So the output gap would be:
($820 billion - $847 billion) / $847 billion = -3.18%
This is closest to answer choice C, which is -3.6%.

Refer to the Following Table A)19% B)1

Refer to the Following Table A)19%
B)1