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Question : The gap between E and S represents-

Option 1: Deflationary gap
 

Option 2: Inflationary gap
 

Option 3: Investment gap
 

Option 4: Output gap
 


Team Careers360 7th Jan, 2024
Answer (1)
Team Careers360 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.

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