A recessionary output gap implies that
A)there is excess demand for most factors of production .
B)the intersection of AD and AS occurs where real GDP exceeds potential output.
C)the economy's resources are being used at more than their normal capacity.
D)the demand for all factor services will be relatively low.
E)there is upward pressure on wages.

Question

Quizplus · Accepted Answer

A recessionary output gap means that the actual output is less than the potential output, indicating underutilization of resources and lower demand for factor services.

A Recessionary Output Gap Implies That