Dear OTA: Could you please explain the following to me. I am struggling with economics. Thanks
***Please compare and contrast the concepts of inflationary and recessionary gaps.
***Please discuss the effects of an increase and decrease in productivity on aggregate supply.
Thank you
Solution Preview
inflationary and recessionary gaps and aggregate supply
Dear OTA: Could you please explain the following to me. I am struggling with economics. Thanks
***Please compare and contrast the concepts of inflationary and recessionary gaps.
Inflationary gap refers to the sum by which the aggregate expenditure schedule must move downwards to decrease the GDP to equilibrium. When the aggregate demand is greater than the economy's capacity, there is an inflationary gap.. In this time it is expected that there will be increasing inflation and a deteriorating trade situation. In such cases the economy has been growing leading to an escalation of inflationary pressure with an increase in demand. Inflationary gaps happen when the economy has expanded for some time because of the high levels of ...
Solution Summary
This solution gives you a detailed discussion on Inflationary and Recessionary Gaps
... that the change in government purchases of goods and services, government transfers, or taxes necessary to close an inflationary or recessionary gap is larger. ...
... the two kinds of output gaps: 1. RECESSIONARY... A recessionary gap, also termed a contractionary gap... 2. INFLATIONARY GAP: The difference between the equilibrium ...
... In the attached graph the recessionary gap is a period of low inflation, high unemployment and falling output, while the inflationary gap is a period of high ...
... d. Is there a recessionary or inflationary gap now? How much? ... It also talks about inflationary and recessionary gaps as well as unemployment. ...
... The recessionary gap is defined as the difference between the full employment level of national ...Inflationary and Deflationary Gaps, http://www ...
...Recessionary and inflationary gaps are closely related to price levels. In an inflationary gap, economy-wide deficits in output result in unplanned decreases ...
... see attached file "Infgap." Likewise a recessionary gap is generated ... describe the concepts of full employment, inflationary gaps, and recessionary gaps...
... output and the AD curve shifts out, the economy will be in: a. an inflationary gap and eventually the SAS curve will shift down. b. a recessionary gap and the ...
