Which of the following is most likely to occur in an economy experiencing a negative output gap?
Actual GDP exceeds the trend rate of GDP.
There is a high level of spare capacity.
Significant demand-pull inflationary pressures exist.
The rate of unemployment is below the natural rate.
327 exam-style questions on AQA A Level Economics 2.3 Economic performance, covering 2.3.1 Economic growth and the economic cycle, 2.3.2 Employment and unemployment, 2.3.3 Inflation and deflation, and 2.3.4 Possible conflicts between macroeconomic policy objectives. Each one has a worked solution and a mark scheme showing where the marks go.