2.5.2 - Output Gaps

Question 1

Output gap

Answer 1

Difference between actual and potential GDP

Question 2

Positive output gap

Answer 2

Actual GDP is above potential GDP

Question 3

Negative output gap

Answer 3

Potential GDP is higher than actual GDP, large spare capacity

Question 4

Factors to assess

Answer 4

Productivity, labour force, business confidence and output, underemployment