The amount by which the eilibrium level of real GDP exceeds the full employment level of GDP is called

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Q: 57 (CAPF/2021)
The amount by which the eilibrium level of real GDP exceeds the full employment level of GDP is called

question_subject: 

Economics

question_exam: 

CAPF

stats: 

0,48,30,15,48,9,6

The correct answer is option 2, Inflationary gap.

An inflationary gap occurs when the equilibrium level of real GDP exceeds the full employment level of GDP. It represents a situation in which the economy is producing more goods and services than it can sustainably maintain in the long run.

Option 1, Recessionary gap, refers to the opposite scenario where the equilibrium level of real GDP is below the full employment level. This represents a situation of unused economic resources and lower than potential output.

Option 3, Income multiplier, refers to the concept that changes in spending can have a multiplied effect on the overall economy. It does not directly relate to the amount by which the equilibrium level of real GDP exceeds the full employment level.

Option 4, Automatic stabilizer, refers to government policies or programs that are automatically triggered to help stabilize the economy during times of economic fluctuations. While it may have some indirect impact on the equilibrium level of real GDP, it is not directly related to the question at hand.

Therefore, the correct answer is option 2, Inflationary gap.

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