Deflationary gap said to exist when ........

Economics- Phase (I & II) Inflation and Phillips Curve

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Deflationary gap said to exist when _________?

Real GDP > Potential GDP

Real GDP < Potential GDP

Real GDP = Potential GDP

Unemployment rate > natural rate of unemployment

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Explanation:

Deflationary gap is the amount by which actual aggregate demand falls short of aggregate supply at level of full employment'. It is a measure of amount of deficiency of aggregate demand When the potential GDP is higher than the real GDP, the gap is referred to as a deflationary gap