Compare and contrast the recessionary expenditure gap and the inflationary expenditure gap.
What will be an ideal response?
A recessionary expenditure gap is the amount by which aggregate expenditures fall short of the noninflationary full-employment level of GDP. Real GDP will be below full-employment real GDP by a multiple amount of the recessionary expenditure gap. An inflationary expenditure gap, on the other hand, is the amount by which aggregate expenditures exceeds the noninflationary full-employment level of GDP. This gap will cause demand-pull inflation as nominal GDP rises to meet the higher level of aggregate expenditures, but real GDP is already at its full-employment level.
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A federal deficit of $300 billion means that
A) the government plans on collecting $300 billion in taxes this year. B) the government has a total debt of $300 billion. C) the government is spending $300 billion a year more than it is collecting in taxes. D) government spending is $300 billion a year.
The success of Walt Disney's animated film The Lion King in 1994 increased production of animated films, increasing the demand for animators much faster than the supply of animators was increasing
As a result, in the market for animators, the equilibrium wage fell and the equilibrium quantity increased. Indicate whether the statement is true or false
In a competitive market, if buyers did not know all the prices charged by the many firms
A) all firms still face horizontal demand curves. B) firms sell a differentiated product. C) demand curves can be downward sloping for some or all firms. D) the number of firms will most likely decrease.
Open market operation
What will be an ideal response?