2.5.2 Output gaps Flashcards
1
Q
What is the difference between the actual growth rate and the long-term growth rate
A
- actual is the real growth rate of GDP each year
- long term is the compound annual growth rate
2
Q
What is an output gap?
A
the difference between actual GDP vs potential GDP
3
Q
What is a negative output gap?
A
when actual output is less than maximum output that can be produced in an economy
4
Q
What is a positive output gap?
A
when actual output is more than full capacity output
