Is Canada in a recessionary gap or inflationary gap right now? and how could you tell?

Q: Can you explain how expectations about future prices and incomes will affect consumption?

A: Consumption measures the total consumption spending by the households on different goods and…

Q: From a Real Business Cycle (RBC) point of view, what is the impact of a contractionary policy on an…

A: According to Real business cycle theory the recovery of the cycle, the money demand will rise.…

Q: The interest rates are considerably higher in Turkey. How do you think the high interest rates…

A: Interest rates are one of the very important macroeconomic variables that have an effect on GDP, the…

Q: Discuss how Keynesian economic can help a country facing an economic recession.

A: Monetary policy describes or portrays the actions taken by the monetary authority of the nation…

Q: The Great Resignation: What does it mean for the economy?

A: The phenomenon known as "The Great Resignation" refers to the unprecedented amount of workers…

Q: What might be some Keynesian prescriptions to get the economy out of an economic slump (both fiscal…

A: Under the Keynesian theory, the aggregate demand is given by the sum of consumption demand (C),…

Q: Current GDP increases relative to potential GDP if and only if aggregate demand exceeds current GDP?

A: The output gap is defined as the difference between real GDP and potential GDP. When the production…

Q: address the problem of an economic recession caused by high inflation, governments and central banks

A: An economic recession is a prolonged period of considerable fall in economic activity that often…

Q: What do you expect about the unemployment rate and inflation rate when we have the actual level of…

A: Actual level of output refers to the production of goods and services that are actually produced in…

Q: During the recession of 2008, Did the US Government take a page of the Keynesian Macro theory to…

A: Keynesian macro theory primarily identifies the role of government or government intervention in…

Q: An increase in household consumption may increase output and the price level. Explain how monetary…

A: The government of an economy plays a major role in the development of an economy. With the help of…

Q: According to the Keynesian framework, ____________ in _______________ may cause inflation, but not a…

A: Inflation usually means rise in prices and and recession is such a period where less demand are seen…

Q: What happens when aggregate demand decreases?

A: Aggregate demand refers to all of the consumers' combined demand for all goods and services in the…

Q: Explain what are the lags in macroeconomic policies. Do these lags have more effect on monetary…

A: Macroeconomic policies are used to stabilize the economy in different phases of the business cycle.…

Q: Why might economists in the United States fear that Stagflation could develop in 2022?

A: Stagflation is defined as a situation "marked by weak economic development and relatively high…

Q: What determines aggregate demand in the economy? give a few examples in paragraphs

A: The total amount of demand in the economy and the measurement of the demand for all the goods and…

Q: What were the monetary and fiscal policy responses to the Great Recession? Discuss their…

A: During the late 2000s, the nice Recession was defined by a dramatic drop by profitable exertion.…

Q: Explain and illustrate graphically recessionary and inflationary gaps.

A: The aggregate demand curve(AD) shows a different combination of quantity of real GDP demanded and…

Q: what is management's usual reasons for using LIFO in an inflationary economy?

A: LIFO means last in first out, it is an accounting principle used in in calculating the cost of goods…

Q: An economy is currently at point A in the graph below. How would this economy return to equilibrium…

A: The government set policies to stabilize the economy. The major policies are fiscal and monetary…

Q: Now that you have learned about the Keynesian perspective, what do you think about it?  In your…

A: Economics is the study of how the scarce resources of society are exploited. It is a social science…

Q: Households tend to increase their spending during a recession because they realize that more…

A: Recession:- Recession can be defined as a period of economic contraction during which economic trade…

Q: Assume that the economy has an inflationary gap. Explain how the economy will remove this gap…

A: An inflationary gap measures the difference between the actual production of the economy and the…

Q: What happens when aggregate demand Increases? give examples in paragraphs

A: Aggregate demand is the summation of individual demand made in the economy for a given time.…

Q: Should the US be more concerned about deflationary pressure or inflationary pressure at this time?…

A: Inflation refers to the sustained increase in the general price level of goods and services in an…

Q: Which substitute we may use if future prices are not expected to follow thegeneral inflation rate?

A: Future price refers to the future value of the same commodity at some set future date.  The general…

Q: Why do economists think the classical dichotomy holds in the long run?

A: The classical dichotomy refers to the classical theory that real variables are independent of…

Q: What is the recessionary gap and inflationary gap? Explain the following concepts in detail. Use…

A: The cross-section of the economy’s AD and short-run AS curves computes the equilibrium real GDP and…

Q: What is the Keynesian prescription for recession? For inflation?

A: Before the 1930s’ great depression in the world, the classical economists were prevalent in the…

Q: Define the term recessionary gap and inflationary gap why do they occur

A: Recessionary gap refers to the situation where the output level is below the full employment level.…

Q: Keynes once said, “Look after the unemployment, and the deficit will look after itself”. Explain…

A: "Note: The question has been answered in a generalized manner." Unemployment is the percentage of…

Q: Use aggregate supply and demand diagrams to explain what would happen to GDP and inflation in the…

A: Government spending is the total spending by government on all goods and services in a given period.…

Q: importance of aggregate demand in macro economics and importance in Indian economy ?

A: Aggregate demand is the final demand or the total demand for final goods and services at a given…

Q: How does an increase in wealth effect the price level and real GDP?

A: An accumulation of valuable economic resources that may be valued in terms of physical products or…

Q: Give a solution to fix a serious national recession

A: The recession is a situation of declining the Gross Domestic Product of the economy due to the…

Q: Do you think there is a predictable relationship between the business cycle and aggregate investment…

A: The fluctuation in the economic activity is tracked by the business cycle. In an economy, the fall…

Q: Explain why a supply shocks is most of the time believed to be temporary? And does not result in…

A: A supply usually shock occurs when the supply of a commodity or service suddenly increases or…