--%>

Concept of deflationary gap

Elucidate the concept of deflationary gap.

Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium.

   Related Questions in Macroeconomics

  • Q : Definition of equilibrium price

    Definition of equilibrium price: It is the price which balances quantity demanded and quantity supplied. The equilibrium price is frequently termed as the "market-clearing" price since both buyers and sellers are p

  • Q : Describe open market operations

    Describe open market operations? What is its consequence on availability of credit? Answer: Open market operations signify the purchase and sale of government secur

  • Q : Economics I help with part 2 and the 4

    I help with part 2 and the 4 part question.

  • Q : What is long run supply curve Please

    Please brief the knowledge what is long run supply?

  • Q : Stage of the business cycle What stage

    What stage of the business cycle is our economy experiencing at present time? proof your answer.

  • Q : Fiscal and Monetary policies How can

    How can governments seek to control their national economies through fiscal and monetary policies?

  • Q : Control of Inflation Economists agree

    Economists agree that inflation beyond a moderate rate is undesirable as it can often prove disastrous and therefore, it must be kept under control. Economists agree also that an appropriate mix of fiscal and monetary policies can be helpful in controlling inflation.

  • Q : How Bank rates control the credit How

    How Bank rates control the credit? Answer: Bank rate is the rate of interest at which the Central bank lends to Commercial banks. By increasing the bank rate centra

  • Q : What points out revenue deficit What

    What points out revenue deficit? Answer: Revenue deficits are stated as the surplus of revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Recei

  • Q : Problem on production function Consider

    Consider a model economy with a production function Y = K0.2(EL)0.8, where K is capital stock, L is labor input, and Y is output. The savings rate (s), which is defined as