If the GDP gap is positive, then:

CA Foundation · Business Economics · MTP · June 2024
If the GDP gap is positive, then:
(A) A. The inflation rate is falling
(B) B. Actual GDP is greater than potential GDP
(C) C. Potential GDP is greater than actual GDP
(D) D. The unemployment rate is rising

Suggested Answer and Working Notes:

Correct Answer: Option (B)

B. Actual GDP is greater than potential GDP

Topics: Business Cycles

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