The GDP gap is:
A) The difference between equilibrium output and full-employment output.
B) The amount of output at the ideal price level.
C) Equal to the difference between imports and exports.
D) Equal to the multiplier.

Question

Quizplus · Accepted Answer

The GDP gap refers to the difference between actual output and potential output, which is the output level at full employment. Therefore, the correct choice is A. The other choices are not accurate definitions of the GDP gap.

The GDP Gap Is