Written by the Fiveable Content Team • Last updated August 2025
Verified for the 2027 exam
Verified for the 2027 exam•Written by the Fiveable Content Team • Last updated August 2025
Definition
A positive output gap that occurs when short-run equilibrium output is above the full-employment level of output, leading to upward pressure on the price level.
AP course connection
Topic 3.5: 3.5 Equilibrium in Aggregate Demand-Aggregate Supply (AD-AS) Model