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.
Elucidate the concept of deflationary gap.
Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium.
Fiscal policy measures used for achieving full-employment level of output and price include increase in the government expenditure and cut in tax rates. A cut in tax rates eliminates only the adverse effect of high tax rates, whereas an increase in government expendit
The direct economic resources a farmer employs to generate avocadoes would not comprise: (I) human capital in form of expertise regarding growing avocadoes. (II) fertile land. (III) loans from a bank to finance SUCH year’s crop. (IV) machinery,
Why the value of MPC is not greater than 1? Answer: This is because change in consumption can never be more than change in income.
Explain in short the income approach to evaluate national income. Answer: Under income method to compute the National Income, the steps given below have been taken into account: A) First of all production units tha
What points out revenue deficit? Answer: Revenue deficits are stated as the surplus of revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Recei
Whenever longer periods are considered and hence bigger ranges of adjustments (that is, substitutions) become probable, demand curves tend to become: (i) Flatter, and therefore do supply curves. (ii) Flatter, as supply curves become steeper. (iii) Ste
Explain evaluation of net present value (NPV) and internal rate of return (IRR) in brief?
Describe any two measures by which a Central Bank can attempt to decrease the gap. Answer: Central bank can decrease this gap by adopting two measures illustrated b
The law of equivalent marginal advantage is violated when people: (1) think about paying a higher price that ensures better quality. (2) elect a general as president while war clouds threaten. (3) fail to allocate similar resources within equally valu
Firms which serve customers who vision the firm’s output as perfectly substitutable for the outcomes of huge numbers of other firms confront: (i) Horizontal (that is, perfectly price elastic) demand curves. (ii) Predatory pricing from greater mo
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