Question : The gap between E and S represents-
Option 1: Deflationary gap
Option 2: Inflationary gap
Option 3: Investment gap
Option 4: Output gap
Answer (1)
18th Jan, 2024
Correct Answer:
Inflationary gap
Solution :
Inflationary gap is the gap where actual AD exceeds the AD required to establish full employment equilibrium.
The gap between E and S is inflationary gap.
Hence, Option B is correct.
Hence, Option B is correct.
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