Exhibit 10-6 -In Exhibit 10-6,the distance between Y₁ and Y₂ is called A)an expansionary gap B)a contractionary gap C)an increase in potential output D)a decrease in potential output E)the natural rate of unemployment

Question

Quizplus · Accepted Answer

The distance between Y₁ and Y₂ represents a contractionary gap, which is the difference between actual output and potential output. This can be seen as a shortfall in the economy's productive capacity, leading to increased unemployment and decreased economic growth.

Exhibit 10-6 -In Exhibit 10-6,the Distance Between Y1 and Y2 Is Called

Exhibit 10-6 -In Exhibit 10-6,the Distance Between Y₁ and Y₂ Is Called