Following a period of prolonged monetary tightening and slowing global demand, several major economies have seen actual GDP fall significantly below their long-run trend level of output, resulting in a persistent negative output gap.
Explain the main economic problems for an economy of experiencing a large, persistent negative output gap.
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.