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Lauren Byron
on Nov 11, 2024

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An expansionary gap is equal to:

A) real GDP minus nominal GDP.
B) nominal GDP minus real GDP.
C) the actual short-run output minus potential output.
D) the actual price level minus expected price level.
E) the actual long-run real GDP minus actual short-run disposable income.

Expansionary Gap

A condition in which the actual output of an economy surpasses the level of output at full employment, commonly resulting in inflation.

Real GDP

Gross Domestic Product adjusted for inflation, reflecting the value of all goods and services produced by an economy in a given year in real terms.

Nominal GDP

The total market value of all goods and services produced within a country’s borders in a given period without adjusting for inflation.

  • Comprehend the consequences of expansionary and recessionary gaps in the short term.
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Chloe BradleyNov 15, 2024
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