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Doctors Medicines MCQs Q&A

  1. Unemployment
  2. Low / negative rates of economic growth
  3. High Inflation rate
  4. Fall in total output in an economy
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Option 3 : High Inflation rate

A deflationary gap means that the economy is below full capacity and there is low growth. It doesn’t necessarily mean deflation because even in a recession with falling output, we may still get very low rate of inflation. Impact of deflationary gap includes, Unemployment, Low / negative rates of economic growth, Low rates of inflation / disinflation. Possibly deflation etc.
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