--%>

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 : 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 : Cost of a foreign currency When cost of

    When cost of a foreign currency increases its supply too increases. Elucidate why?

  • Q : Determinants of transaction demand.

    With the help of graph discuss the determinants of transaction demand.

  • Q : Calculating Trade balance Suppose the

    Suppose the value of exports of goods of a country is Rs. 1,000 crores and the value of imports of goods is Rs. 1,200 crores, what will be the trade balance (or balance of trade)?

  • Q : Expanding consumption of a good I have

    I have a problem in economics on Expanding consumption of a good. Please help me in the following question. Your consumption of a good tends to expand if it’s: (i) Relative marginal utility surpasses its relative price. (ii) Total utility is les

  • Q : Illustration of equal marginal advantage

    Can someone please help me in finding out the accurate answer from the following question. Shoppers who shift among checkout lanes until it emerges that all register lines are probable to be equally time-consuming are trying to verify to the law of: (i) Equivalent mar

  • Q : The market system 1. Examples of

    1. Examples of command economies are: A. The United States and Japan. B. Sweden and Norway. C. Mexico and Brazil. D. Cuba and North Korea.

  • Q : National income Gross domestic capital

    Gross domestic capital formation is always greater than gross fixed capital formation

  • Q : Demand-pull inflation What is

    What is "demand-pull" inflation?

  • Q : Custodian of nations foreign exchange

    Name the institution that acts as a custodian of nation’s foreign exchange reserves? Answer: The Central Bank is an institution that acts as custodian of natio