deflationary gap

deflationary gap definition - business

deflationary gap

The amount by which the economy's aggregate demand is below full employment output. A substantial deflationary gap is likely to spur the Federal Reserve to reduce interest rates in an attempt to stimulate the economy.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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