Refer to the following table. What was the approximate output gap in 1998?
$$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Real GDP } \
\text { (trillions of \$) }
\end{array} & \begin{array} { c }
\text { Potential GDP } \
\text { (trillions of \$) }
\end{array} \
\hline 1995 & 3.20 & 3.30 \
\hline 1996 & 3.45 & 3.65 \
\hline 1997 & 3.75 & 3.89 \
\hline 1998 & 4.05 & 4.10 \
\hline 1999 & 4.38 & 4.30 \
\hline
\end{array}$$

Question

Refer to the following table. What was the approximate output gap in 1998?
$$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Real GDP } \
\text { (trillions of \$) }
\end{array} & \begin{array} { c } 
\text { Potential GDP } \
\text { (trillions of \$) }
\end{array} \
\hline 1995 & 3.20 & 3.30 \
\hline 1996 & 3.45 & 3.65 \
\hline 1997 & 3.75 & 3.89 \
\hline 1998 & 4.05 & 4.10 \
\hline 1999 & 4.38 & 4.30 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The output gap is calculated as $\frac{\text{Real GDP} - \text{Potential GDP}}{\text{Potential GDP}} \times 100$. For 1998, this is $\frac{4.05 - 4.10}{4.10} \times 100 = -1.2\%$.

Refer to the Following Table A)3% B)-5

Refer to the Following Table A)3%
B)-5