-In the above figure,the inflationary gap when AD₂ is the aggregate demand curve equals
A) the difference between 110 and 100.
B) the difference between $13.5 trillion and $13.0 trillion.
C) LAS minus SAS at a price level of 100.
D) AD₁.

Question

-In the above figure,the inflationary gap when AD₂ is the aggregate demand curve equals
A) the difference between 110 and 100. 
B) the difference between $13.5 trillion and $13.0 trillion. 
C) LAS minus SAS at a price level of 100. 
D) AD₁.

Quizplus · Accepted Answer

The inflationary gap is the difference between the actual output (AD₂) and the potential output (AD₁), which is represented by the difference between $13.5 trillion and $13.0 trillion.

-In the Above Figure,the Inflationary Gap When AD₂ Is the Aggregate