Topic: A Recessionary Gap Exists If
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What is a recessionary gap
It's when an economy is operating at below its full-employment equi... ...MORE... Read More »
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What are recessionary and inflationary gaps?
SELF CORRECTION, AGGREGATE MARKET: The automatic process in which the aggregate market adjusts from short-run equilibrium to long-run equilibrium. Self-correction results through shifts of the short-run aggregate supply curve caused by chan... Read More »
Source: http://answers.yahoo.com/question/index?qid=20090216163105AALFDuZ
If the economy is in equilibrium, how can a recessionary gap exis...
So a recessionary gap is when demand for output shrinks. This is also called a deflationary gap because the predicted long run outcome is a decrease in prices. What happens is that in the short run aggregate demand falls from its equilibriu... Read More »
Source: http://answers.yahoo.com/question/index?qid=20090429141544AARx4qF
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Answers to Other Common Questions
A conservative would argue t...
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Flawed government policies = recession. Flawed supply demand and greed = inflation
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They allow cells to replicate organelles and manufacture additional cytoplasm.
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The answer is D.
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The GDP gap or the output gap is the difference between actual GDP and potential GDP or potential output. The calculation for the output gap is Y-Y* where Y is actual output and Y* is potential output or the natural level of output. If this...
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Source: http://answers.yahoo.com/question/index?qid=20080116034907AAY2UQA
Austrians view entrepreneurship not just capital as the driving force in economic development. However they believe that money is not neutral in the short run so do not fundamentally disagree with monetarist about the cause of recessions. I...
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Well if prices are flexible, then wages will go down --> Supply will increase to make up the gap. OR The Central Bank cuts interest rates, which increases ivestment, which increases Aggregate Demand.
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Source: http://answers.yahoo.com/question/index?qid=20091117233844AAI1Qc3
