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 is the main trade off in macroeconomics, with reference to inflation and unemployment? Use the quantity theory of money to explain a macroeconomic case of inflation. A well-known economic model called the Phillips Curve describes the...
What Is Macroeconomics WhatIsMacroeconomics?•Macroeconomicsisthestudyofthebehavioroftheeconomyasawholeandthepolicymeasuresthatthegovernmentusestoinfluenceit •Utilizesmeasuresincludingtotaloutput,ratesofunemploymentandinflation,andexchangerates •Examinestheeconomyintheshortandlongrun •Shortrun:movementsinthe...
Advances in Macroeconomics 5(1), Article 3.Nelson, E. (2005) The great inflation of the seventies: What really happened? Advances is macroeconomics, 5, 1, pp. Article 3.Nelson, Edward. (2005). "The Great Inflation of the Seventies: What Really Happened?" Advances in Macroeconomics, 5(1...
What is the economic meaning of a recession? What does political economy mean, in the context of Macroeconomics? What is your understanding of the term: "Economic Growth"? What is meant by the term "Consumer Sovereignty" as used in economics?
Microeconomics is the study of economics which deals with the activities related to individual units that is; an individual consumer decision to maximize the satisfaction, the individual producer main aim is the maximization of profit.Answer and Explanation: The concept of ends, means...
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. ...
Macroeconomics›What is a Recessionary Gap? Definition: A recessionary gap, also known as a contractionary gap, is the difference between the real GDP and the potential GPD. The potential GDP outweighs the real GDP because the aggregate output of the economy is less than the aggregate output ...
There are four resources or factors required for the production of goods and services, namely, land, labor, capital, and entrepreneurship. The objective of any firm is usually to maximize profit or minimize costs without affecting the quality of products or services unfavorably....
Because the output gap relies on the gross domestic product in its calculation, it helps provide a picture of how the economy is doing. More specifically, it can be used as a way to determine whether the economy is underperforming or is growing too quickly. That's because this gap can hel...