-Refer to the graph in the exhibit.If the economy is at point H, what is the gap?
A) an expansionary gap of $300 billion
B) a recessionary gap of $300 billion
C) an expansionary gap of 20
D) a recessionary gap of 10

Question

-Refer to the graph in the exhibit.If the economy is at point H, what is the gap?  
A) an expansionary gap of $300 billion 
B) a recessionary gap of $300 billion 
C) an expansionary gap of 20 
D) a recessionary gap of 10

Quizplus · Accepted Answer

If the economy is at point H, it is operating below its potential output level, indicating that the actual output is less than the potential output. This situation is referred to as a recessionary gap, where the gap amount is typically represented in monetary terms, such as $300 billion in this case.

-Refer to the Graph in the Exhibit