Recessionary GAP

The term can be used in global economic and investment analytics to find if the current economy is working below (or equal to) the full employment capacity. If there the number of jobs is less, there exists a recessionary gap where the level of real GDP is lower than full employment. 

One has to calculate the percentage gap by comparing the real with the potential GDP. It is sometimes called the contradictory gap, which involves calculating GDP from the difference between the real and the potential. 

The intersection of the economy’s aggregate demand and the short-run aggregate supply curves helps to identify the economy’s BLANK price level, the equilibrium, and the real gross domestic product.