Macroeconomics
Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
Question
Chapter 9, Problem 1WNG

 (a)

To determine

Estimate the diagrammatic explanation for the long-run equilibrium.

(b)

To determine

Estimate the diagrammatic explanation for a recessionary gap.

(c)

To determine

Estimate the diagrammatic explanation for an inflationary gap.

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Students have asked these similar questions
An economy is at full employment. Which of the following events can create a recessionary gap? A.An increase in foreign income. B.An increase in government spending. C.An increase in taxes. D.A decrease in nominal wages.
Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an economic boom, and (c) a recession.  What will happen in each case if it's only temporary?  What will happen in each case if it's permanent?
what is meant by a recessionary gap and an inflationary gap in the AD/AS model.
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