Answered: Suppose that there is an economy with…

Suppose that there is an economy with the AD and AS functions below: AD: P = 2500 - 2Y SRAS: P = 300 + 2Y LRAS: 800 Calculate the recessionary or inflationary gap. Answer: 300

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Classical Macro Economics And The Self Regulating Economy

Section: Chapter Questions

Problem 9QP

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Question

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Suppose that there is an economy with the AD and AS functions below:
AD: P = 2500 - 2Y
SRAS: P = 300 + 2Y
LRAS: 800
Calculate the recessionary or inflationary gap.
Answer: 300

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