Which of the following statements is false? A) Recessionary gaps in Canada had been deeper and more persistent than the inflationary gaps during the period of 1982-2008. B) Positive output gaps imply recessionary gaps. C) Zero output gaps imply zero inflationary as well as and zero recessionary gaps. D) Zero output gaps occur when actual GDP (Y) equals potential GDP (Y_P).

Question

Quizplus · Accepted Answer

Positive output gaps imply the economy is producing above its potential, leading to inflationary pressures, not recessionary gaps. Recessionary gaps occur when there's a negative output gap, meaning the economy is producing below its potential.

Which of the Following Statements Is False