The deflationary gap is

the amount by which aggregate demand falls short of aggregate supply at full employmentCorrect answerYour answerthe fall in prices in a yearCorrect answerYour answerthe amount by which AD exceeds AS at full employmentCorrect answerYour answerthe gap between saving and consumptionCorrect answerYour answer

Show the answer and explanation

CorrectNot quiteAnswer A

Correct answer: A

It measures the shortfall of demand at the full-employment level of output.

Concept: Deflationary gap
Typical timeTypical: 40 s
Your timeYours: —

The rule this testsDeficient demand and the deflationary gap

Practise this chapter →

Ten questions from Excess & Deficient Demand, at your own pace.

Practise this chapter →

Ten questions from Excess & Deficient Demand, at your own pace.

Practise this chapter All 53 questions in Excess & Deficient Demand Revise the notes for Excess & Deficient Demand

The deflationary gap is

Explanation