A recessionary expenditure gap is:
A) the amount by which the full-employment GDP exceeds the level of aggregate expenditures.
B) the amount by which equilibrium GDP falls short of the full-employment GDP.
C) the amount by which investment exceeds saving at the full-employment GDP.
D) the amount by which aggregate expenditures exceed the full-employment level of GDP.

Question

Quizplus · Accepted Answer

A recessionary expenditure gap occurs when the full-employment GDP exceeds the level of aggregate expenditures, indicating insufficient demand to achieve full employment.

A Recessionary Expenditure Gap Is