The GDP gap differs from the AD shortfall when:
A. The aggregate supply curve slopes upward.
B. The multiplier effect raises spending.
C. The AS curve is horizontal.
D. There is a time lag in the implementation of fiscal policy.
Answer:A
The GDP gap differs from the AD shortfall when:
A. The aggregate supply curve slopes upward. B. The multiplier effect raises spending. C. The AS curve is horizontal. D. There is a time lag in the implementation of fiscal policy.