Refer to the following table. What was the approximate output gap in 1981?
$$\begin{array} { | l | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Real GDP } \
\text { (billions of \$) }
\end{array} & \begin{array} { c }
\text { Potential GDP } \
\text { (billions of \$) }
\end{array} \
\hline 1980 & 175 & 179 \
\hline 1981 & 182 & 185 \
\hline 1982 & 189 & 188 \
\hline 1983 & 196 & 194 \
\hline 1984 & 202 & 198 \
\hline
\end{array}$$

Question

Refer to the following table. What was the approximate output gap in 1981?
$$\begin{array} { | l | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP } \
\text { (billions of \$) }
\end{array} & \begin{array} { c } 
\text { Potential GDP } \
\text { (billions of \$) }
\end{array} \
\hline 1980 & 175 & 179 \
\hline 1981 & 182 & 185 \
\hline 1982 & 189 & 188 \
\hline 1983 & 196 & 194 \
\hline 1984 & 202 & 198 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The output gap is calculated as $\frac{\text{Real GDP} - \text{Potential GDP}}{\text{Potential GDP}} \times 100$. For 1981, this is $\frac{182 - 185}{185} \times 100 = -1.6\%$.

Refer to the Following Table A)05% B)1% C)-2

Refer to the Following Table A)05%
B)1%
C)-2