(Answered) The GDP gap can only be negative; it cannot be positive.TrueFalseThe GDP gap can only be negative;…

➤ Can the GDP gap be positive?
Yes. A positive GDP gap occurs when actual GDP exceeds estimated potential GDP. It indicates an economy operating above sustainable capacity, often raising inflationary pressure and tight labor markets. Central banks may tighten policy to cool demand and return output toward its long-term trend.