--%>

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 : Price ratios and marginal utility ratios

    I have a problem in economics on Price ratios and marginal utility ratios. Please help me in the following question. The efficiency in consumption needs equality of: (i) Income distribution. (ii) All product price and resources. (iii) MC and MR. (iv)

  • Q : In which of these two statements

    "In corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in response to changes in supply and demand."

  • Q : Market system The market system's

    The market system's answer to the fundamental question "How will the system promote progress?" is essentially:

  • Q : Help If the price of K declines, the

    If the price of K declines, the demand curve for the complementary project J will:

  • Q : Functions of central bank Describe

    Describe functions of central bank? Answer: (A) Issue of currency: Central bank is the only authority for the issue of currency

  • Q : MPC What relationship does the MPC bear

    What relationship does the MPC bear to the size of the multiplier? The MPS? What will the multiplier be when the MPS is 0, .4, .6, and 1

  • Q : Meaning of Fiscal policy Meaning of

    Meaning of Fiscal policy:Fiscal policy is the set of decisions and principles of a government regarding the extent of public expenses and mode of financing them. It is about the attempt of g

  • Q : IMF? In saying that the present system

    In saying that the present system of floating exchange rates is managed we mean that: IMF officials determine exchange rates on a day-to-day basis. countries that allow their exchange rate to move freely will lose their borrowing privileges with the IMF. the value of any IMF member's currency

  • Q : What is long run supply curve Please

    Please brief the knowledge what is long run supply?

  • Q : Value added technique for national

    What is the alternative name of value added technique of estimating national income? The alternative name of value added technique of estimating national income is production method.