Which of the following is eliminated when the economy's output is equal to full-employment GDP?
A)The real GDP gap.
B)The multiplier.
C)Leakages and injections.
D)The MPC.

Question

Quizplus · Accepted Answer

The real GDP gap is the difference between actual GDP and full-employment GDP. When the economy's output is equal to full-employment GDP, there is no output gap, and therefore the real GDP gap is eliminated. The multiplier, leakages and injections, and the MPC may still exist even when the economy is at full employment.

Which of the Following Is Eliminated When the Economy's Output