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UI Post-UTME Economics 2023 (Model questions) Question 12

Question 12

National Income

The amount by which the equilibrium level of real GDP exceeds the full employment level of GDP is called ________

  1. A.recessionary gap
  2. B.inflationary gap
  3. C.income multiplier
  4. D.automatic stabilizer
Show the answer and explanation

Answer: B (inflationary gap)

Explanation

When equilibrium output is above the full-employment level, the excess is an inflationary gap.