Explain the difference between recessionary gap and inflationary gap. Discuss how a "conservative" and a "liberal" might differ in the types of policies they advocate to counteract a recessionary gap.

answer

watching

463

views

For unlimited access to Homework Help, a Homework+ subscription is required.

You have 0 free answers left.
Get unlimited access to 3.8 million step-by-step answers.

Get unlimited access

Already have an account? Log in

Yusra AneesLv10

28 Sep 2019

Unlock all answers

Get 1 free homework help answer.

Already have an account? Log in

Related questions

A smaller multiplier means that the change in government purchases of goods and services or taxes necessary to close an inflationary or recessionary gap is larger. Explain this apparent inconsistency?

violetlizard702

If membership falls in labor unions and unions become less popular, then:

	production costs will increase, SRAS will shift to the left, decreasing equilibrium GDP and increasing the aggregate price level.
	production costs will fall, SRAS will shift to the right, increasing equilibrium GDP and lowering the aggregate price level.
	production costs will not change, AD will shift to the right, increasing equilibrium GDP and aggregate price level.
	production costs will fall, there will be a downward movement along SRAS, equilibrium GDP will increase and aggregate price level will fall.

If the short-run macroeconomic equilibrium is _________ of the economy's potential output, then there is a(n) ________ and the aggregate price level is expected to ________.

	to the left; inflationary gap; fall
	to the left; recessionary gap; fall
	to the right; recessionary gap; rise
	to the right; inflationary gap; fall

harlequinplatypus643

Refer to the table for Moola given below to answer the following questions.

A. What is the equilibrium interest rate in Moola?

B. What is the level of investment at the equilibrium interest rate?

C. Is there either a recessionary output gap (negative GDP gap) or an inflationary output gap (positive GDP gap) at the equilibrium interest rate and, if either, what is the amount?

D. Given money demand, by how much would the Moola central bank need to change the money supply in order to close the output gap?

E. What is the (expenditure) multiplier in Moola?