Ch 19: Expansionary & Contractionary Gaps

About This Chapter

Rediscover how projections about the Gross Domestic Product (GDP) can cause expansionary or contractionary gaps in the economy. Look at the lessons in this chapter to brush up on the different economic factors that create these gaps.

Expansionary & Contractionary Gaps - Chapter Summary

Take a peek at this chapter and get reacquainted with how expansionary and contractionary gaps occur. Our instructors have built these lessons to teach you about real-time measurements of the GDP versus projections of where economists believe it should be. Gaps are created when differences exist between these two variables, as our instructors will elaborate on.

As you go through the information, you will uncover why such gaps can be beneficial or detrimental to the economy. Likewise, you will review how various factors relate to the creation of these gaps. Upon completing this chapter, you should possess a fuller comprehension of the following:

  • Characteristics of contractionary gaps
  • Variables that lead to contractionary gaps
  • Expansionary gaps defined
  • Reasons that cause expansionary gaps
  • Gap calculation procedures
  • Methods to visually show the gaps
  • The relationship between the gaps and the central bank
  • How the gaps impact the economy

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Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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