It is evident that the nation is experiencing a recessionary gap when potential output is less than aggregate output. potential output is decreasing at a rate greater than aggregate output is increasing potential output is decreasing. aggregate output is less than potential output. aggregate output is greater than potential output.
A recessionary gap is condition wherein the economy is operating below the full capacity of its employment level. An indication that an economy is experiencing a recessionary gap is when aggregate output is less than potential output The answer is the 4th option.
