The output gap is
A) the difference between target output and realized output.
B) the difference between initial output and final output.
C) the difference between market-clearing output and actual output.
D) the difference between forecasted output and past output.
Question 2
In the IS model, assuming that the real interest rate does not change, an increase in autonomous ________ leads to a decrease in equilibrium saving.
A) investment
B) consumption
C) net exports
D) all of the above
E) none of the above
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