-In the above figure, the inflationary gap can correctly be identified as
A)the difference between 125 and 120.
B)the difference between 12.2 trillion and 12 trillion.
C)LRAS minus SRAS.
D)AD₁.

Question

-In the above figure, the inflationary gap can correctly be identified as
A)the difference between 125 and 120. 
B)the difference between 12.2 trillion and 12 trillion. 
C)LRAS minus SRAS. 
D)AD₁.

Quizplus · Accepted Answer

The inflationary gap is the difference between the actual output (12.2 trillion) and the potential output (12 trillion).

-In the Above Figure, the Inflationary Gap Can Correctly Be