Calculating the Size of an Expansionary Gap


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question 1 of 3

Which is true about actual economic output during different times of the business cycle?

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1. Why is an 'expansionary gap' sometimes referred to as an 'inflationary gap'?

2. What is the value of this expansionary gap?

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About This Quiz & Worksheet

These assessments test your ability to recognize and calculate expansionary gap as well as your understanding of the situations that create this gap.

Quiz & Worksheet Goals

With these assessments you can determine your knowledge of:

  • The characteristics of actual economic output at different points during a business cycle
  • Why expansionary gap is sometimes referred to as an inflationary gap
  • How expansionary gap is calculated
  • Calculating the size of the gap in a given problem

Skills Practiced

  • Defining key concepts - ensure that you can accurately define the phrase expansionary gap
  • Interpreting information - verify that you can read information on a graph about expansionary gap and interpret it correctly
  • Knowledge application - use your knowledge to determine the expansionary gap graphically

Additional Learning

The lesson Calculating the Size of an Expansionary Gap will give you more information about:

  • The idea behind potential output
  • What creates an expansionary gap
  • The side effect of expansionary gap