How much is the output gap if short-run output is $18.0 trillion and potential output is $18.0 trillion?
A) $18.2 trillion
B) $18.0 trillion
C) +$0.2 trillion
D) -$0.2 trillion
E) $0

Question

Quizplus · Accepted Answer

The output gap is the difference between actual or short-run output and potential output. If they are both $18.0 trillion, then the output gap is zero, meaning the economy is producing at its potential level. Therefore, the answer is E) $0.

How Much Is the Output Gap If Short-Run Output Is