GDP Gap

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DEFINITION of 'GDP Gap'

The forfeited output of a country's economy resulting from the failure to create sufficient jobs for all those willing to work.

INVESTOPEDIA EXPLAINS 'GDP Gap'

A GDP gap denotes the amount of production that is irretrievably lost. The potential for higher production levels is wasted because there aren't enough jobs supplied.

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RELATED FAQS
  1. Why would a country's gross domestic product (GDP) and gross national income (GNI) ...

    A country’s gross domestic product, or GDP, and gross national income, or GNI, are likely to differ considerably because ... Read Full Answer >>
  2. While closely related, how do gross domestic product (GDP) and gross national income ...

    Gross domestic product, or GDP, and gross national income, or GNI, are the two most important economic indicators that measure ... Read Full Answer >>
  3. How does the neoclassical growth theory predict real GDP?

    Neoclassical growth theory predicts real gross domestic product (GDP) through measures of total factor productivity, capital, ... Read Full Answer >>
  4. Does the gross national income (GNI) and gross domestic product (GDP) of the U.S. ...

    Usually, the U.S. gross national income (GNI) and gross domestic product (GDP) do not differ substantially. Gross National ... Read Full Answer >>
  5. What developed countries have the greatest exposure to the Internet sector?

    The Internet sector permeates all developed economies. The McKinsey Global Institute estimates that Internet companies constitute ... Read Full Answer >>
  6. What can cause the terminal growth rate to be negative?

    Investors can use several different formulas when calculating terminal value for a firm, but all of them allow – at least ... Read Full Answer >>
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