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Question
The difference by which actual Aggregate Demand exceeds the Aggregate Demand, required to establish full employment equilibrium is known as ______
Options
Inflationary gap
Deflationary gap
Either the Inflationary gap or the Deflationary gap
Neither Inflationary gap nor Deflationary gap
MCQ
Fill in the Blanks
Solution
The difference by which actual Aggregate Demand exceeds the Aggregate Demand, required to establish full employment equilibrium is known as the Inflationary gap.
Explanation:
It calculates the difference between the current level of real GDP and the GDP that would exist if an economy was fully employed.
shaalaa.com
Gross and Net Domestic Product (GDP and NDP)
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