Jon has taught Economics and Finance and has an MBA in Finance Cite this lesson The contractionary gap is when an economy operates below its long-run potential. Learn the definition of a contractionary gap, an illustration of the full employment level of output, and an illustration o...
What would lead to a shift in an economy's production possibilities curve? What is the simple definition of "productive resources" in economics? What are the main factors of production that are known by economics? How can we define "production" in economics? What is total output in...
An inflationary gap occurs when the economy is operating above full employment. It represents the extra output as measured by GDP between what it would be under the natural rate of unemployment and the reported GDP number. Think of it as the rise in GDP driven by inflation. Alternate name:...
Market value: Market value is the amount consumers are prepared to spend on a resource in the market. It is determined by multiplying the existing... See full answer below.Become a member and unlock all Study Answers Start today. Try it now Create an account Ask a qu...
Ecommerce is the business of buying and selling goods and services over the internet. Ecommerce customers can make purchases from their computers as well as other touchpoints including smartphones, smartwatches, and digital assistants such as Amazon’s E
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What is the definition of inflationary gap?An inflationary gap is always related to a business-cycle expansion and arises when theequilibrium levelof an economy’s aggregate output is greater than the output that could be produced at full employment. ...
natural distinction between CPI and PPI inflation rates, a benevolent central bank faces a tradeoff between stabilizing the two measures of inflation: a final output gap, and unique to our model, a real marginal cost gap in the intermediate sector, so that optimal monetary policy is second-best...
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An output gap is an unfavorable indicator of an economy'sefficiency, regardless of whether it's positive or negative. A positive output gap indicates a high demand for goods and services in an economy, which may be considered beneficial for an economy. But the effect of excessively high demand...