Economics
5th Edition
ISBN: 9781319066604
Author: Paul Krugman, Robin Wells
Publisher: Worth Publishers
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Question
Chapter 30, Problem 7P
To determine
Concept Introduction:
Economic Recession: This period is the early stage of depression in this period the economy is in the declining stage where slowdown is seen in the stock market, household market as well as there is an increase in
Inflationary Gap: At the level of full employment, if the value of the real GDP is greater than the value of the potential GDP, it leads to emergence of inflationary gap.
Recessionary Gap: At the level of full employment, if the value of the potential GDP is greater than the value of the real GDP, it leads to emergence of recessionary gap.
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