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

The amount by which the equilibrium level of real GDP exceeds the full employment (potential) level of GDP is defined as an inflationary gap. In macroeconomic theory, the equilibrium output determined by aggregate demand does not always coincide with full employment [1]. When the current output is greater than the potential output, the economy is experiencing a boom, and this positive output gap is termed an inflationary gap [2]. Conversely, if the real GDP is less than the full employment level, it is referred to as a recessionary gap [2]. While the income multiplier explains how changes in autonomous expenditure lead to larger changes in equilibrium output, and automatic stabilizers help moderate economic fluctuations, only the inflationary gap specifically describes the excess of real GDP over its potential full employment level.

Sources

1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 4: Determination of Income and Employment > 4.4 SOME MORE CONCEPTS > p. 64
2. [2] https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/national-income-and-price-determinations/equilibrium-in-the-ad-as-model-ap/a/lesson-summary-equilibrium-in-the-ad-as-model