A "recessionary expenditure gap" is:
A)the amount by which the full-employment GDP exceeds equilibrium GDP.
B)the amount by which aggregate expenditures fall short of those required to achieve 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 domestic output.

Question

Quizplus · Accepted Answer

A recessionary expenditure gap is the amount of shortfall in aggregate expenditures needed to achieve the full-employment GDP. This means that at the equilibrium GDP, the level of spending is not sufficient to create enough demand to reach full employment.

A "Recessionary Expenditure Gap" Is