Which of the following is likely to be associated with a negative output gap?
A) Full employment.
B) Zero inﬂation.
C) A boom.
D) A recession.

Question

Quizplus · Accepted Answer

A negative output gap occurs when the actual output of an economy is less than its potential output. This situation is typically associated with a recession, where economic activity is below its long-term trend, leading to underutilized resources, including labor.

Which of the Following Is Likely to Be Associated with a Negative