The difference between aggregate economic activity and potential output is called ________.
A)the business cycle
B)the output gap
C)a recession
D)a trough
E)a co-movement

Question

Quizplus · Accepted Answer

The difference between aggregate economic activity and potential output is called the output gap. This refers to the difference between what the economy is actually producing and what it could produce if all resources were fully utilized. The output gap can provide insight into the overall health of the economy, as well as the potential for inflation or deflation.

The Difference Between Aggregate Economic Activity and Potential Output Is