Output gaps

Q3(a) On the trade cycle diagram, select the point showing a positive output gap.

Q3(b) Explain one difficulty economists face when trying to estimate the output gap for an economy.

Q8 Sketch a Keynesian aggregate demand and supply picture of the spare capacity Ghana had in 2023.

Q4 Deduce what is most likely as an economy moves between two points relative to its trend growth path.

Q5 Choose what usually accompanies a negative output gap, as in the Czech Republic's 2022 manufacturing slump.

Q8 Sketch an AD/AS diagram showing the positive output gap Croatia had in 2022.

Q7 Explain one drawback for Belize of running a positive output gap above 7%.

Q4 Deduce what a diagram of trend and actual growth shows about output gaps and unemployment.

Q10 Explain one effect on Vietnam's economy of the large negative output gap forecast for 2022.

Q8 Sketch an AS and AD diagram illustrating the 5.64% negative output gap France recorded in 2020 once consumer spending slumped.

Q11 Explain the meaning of an output gap, drawing on Japan's real GDP growth for 2019 and 2020 set beside a 0.5% trend rate.

Q6 Canada's real GDP growth for 2017 to 2019 is set beside an estimated 2.7% trend rate; establish what this implies for the output gap.

Q10 Brazil's output gap stood at an estimated -5.6% of GDP in Q1 2019; give one economic consequence such a negative gap brings.

Q4 A diagram plots actual growth against the trend rate for one economy; say what this indicates about unemployment, output gaps and recovery.

Q11 With reference to a chart of two IMF estimates of the French output gap from 1994 to 2017, explain one reason why an output gap is difficult to measure.

Q5(b) Which rise would best close a domestic negative output gap? (World Bank funding / foreign aid spending / public transport spending / income tax)

Q5 Spain's ILO unemployment dropped from 21% in 2014 to below 15% by 2018 — which explanation best fits? (a narrowing negative output gap / more generous welfare payments / weaker export demand / rising economic inactivity)

Q4 Brazil produced below potential in 2017; choose what typically accompanies a negative output gap (high unemployment; strong business confidence; rising house prices; greater wellbeing).

Q3 In 2017 Morocco ran a wide negative output gap; identify the condition typically accompanying one.

Q2(c) Pick out the position on the trade cycle diagram where a negative output gap exists.

Q3(c) Show where a negative output gap sits on the supplied AD/AS diagram.

Q2(a) Using Extract D, say what an 'output gap' is, supported by an AD/AS diagram.