Question

If real GDP at full employment is $5 billion while current GDP is $6 billion, a(n)...

If real GDP at full employment is $5 billion while current GDP is $6 billion, a(n) _____ exists, and will require a _____ in spending to bring the economy back to full employment.

a)

recessionary gap; decrease

b)

recessionary gap; increase

c)

inflationary gap; decrease

d)

inflationary gap; increase

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