If , the macroeconomy is:
A) in an expansionary gap.
B) at its potential level of output.
C) in a recessionary gap.
D) None of these answers is correct.
E) Not enough information is given.

Question

If  , the macroeconomy is:
A) in an expansionary gap. 
B) at its potential level of output. 
C) in a recessionary gap. 
D) None of these answers is correct. 
E) Not enough information is given.

Quizplus · Accepted Answer

The presence of a negative output gap (TB6622_11) indicates that the macroeconomy is currently below its potential level of output, which implies that the economy is experiencing a recessionary gap.

If , the Macroeconomy Is