-In the above figure, the inflationary gap when AD₂is the aggregate demand curve equals A) AD₁. B) the difference between $12.5 trillion and $12.0 trillion. C) the difference between 110 and 100. D) LAS minus SAS at a price level of 100.

Question

Quizplus · Accepted Answer

The inflationary gap is the difference between the actual level of GDP and the potential GDP. Here, it is the difference between $12.5 trillion (actual GDP) and $12.0 trillion (potential GDP).

-In the Above Figure, the Inflationary Gap When AD2 is

-In the Above Figure, the Inflationary Gap When AD₂is