Figure 12.1: -Assuming aggregate demand is represented by AD₁,the economy depicted in Figure 12.1 confronts a real GDP gap of: A) Zero. B) $400 billion. C) $800 billion. D) $560 billion.

Question

Quizplus · Accepted Answer

The real GDP gap is determined by the difference between the potential GDP and the actual GDP as depicted in the aggregate demand and supply curves. Without seeing Figure 12.1, the correct answer cannot be determined definitively. However, assuming the question implies a specific gap, the choice provided as correct (B) suggests a $400 billion gap, which typically would be identified by analyzing the graphical intersection points of aggregate demand and supply curves relative to the potential GDP line.

Figure 12.1: -Assuming Aggregate Demand Is Represented by AD1,the Economy Depicted in Economy

Figure 12.1: -Assuming Aggregate Demand Is Represented by AD₁,the Economy Depicted in Economy