Could You Explain Me About Recessionary Gap With The Help Of The Graph?


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A recessionary gap occurs when the economy is performing at a lesser level then its full employment level. It happens when the economy is going into a recession. A recession can be caused by reduction in consumer expenditure and investment and reduction in net exports due to the nominal exchange rates getting higher.  This is a link where you can find the graph for the recessionary gap along with a simple explanation.

Recessionary gap

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