Question content area

Part $1$

When is the output$$ gap, defined as the percent difference between GDP and potential$$ GDP$,$

negativenegative$?$

Part $2$

A$.$

When actual real GDP

falls belowfalls$$below

potential GDP$.$

B$.$

When the economy experiences

a recessiona$$recession$.$

C$.$

When the$$ economy's capacity to produce

exceedsexceeds

its actual production.

D$.$

All of the above.

E$.$

A and C only.