--%>
Assignment Help - homework help

Inflationary expenditure gap or recessionary expenditure gap

Refer to the table below in answering the questions which follow:

1617_inflationary expenditure gap or recessionary expenditure gap.png

In this economy if full employment is 130 million, will there be an inflationary expenditure gap or recessionary expenditure gap? Describe the consequence of this gap? By how much would aggregate expenditures in column 3 ought to change at each level of GDP to remove the inflationary expenditure gap or recessionary expenditure gap? Illustrates. Describe multiplier in this example?

E

Expert

Verified

A recessionary gap. Equilibrium GDP is $600 billion, whereas full employment GDP is $700 billion. Employment = 20 million less than at full employment. Aggregate expenditures would have to rise by $20 billion (= $700 billion -$680 billion) at each level of GDP to abolish the recessionary gap. The MPC is .8, thus the multiplier is 5.

   Related Questions in Finance Basics

  • Q : Describe benefits of the JIT inventory

    Describe the benefits of the JIT inventory control system? The just-in-time (JIT) inventory control system lowers inventory carrying costs & tends to raise quality.  

    		•
  • Q : Effect of foreign imports Normal 0

    Normal 0 false false

    		•
  • Q : What is a fund Fund: A lawful budgeting

    Fund: A lawful budgeting and accounting entity which offers for the segregation of moneys or other resources in the State Treasury for obligations in accordance with particular restrictions or limitations. A separate set of accounts should be maintain

    		•
  • Q : Assignments i want to write final state

    i want to write final state report. My state is Texas. You can use the resources that i attached, also you can use another resources to cover the outlines.

    		•
  • Q : Capital investment appraisal methods

    The capital investment appraisal methods like NPV, IRR, ARR, PV and Time value of money have become irrelevant post Celtic Tiger. Due to the depth of the recession companies do not have budgets to invest. Explain? At first use this

    		•
  • Q : Define Spot Bill Spot Bill : It is an

    Spot Bill: It is an introduced bill which makes non-substantive modifications in a law, generally with the intent to amend the bill at a later date to comprise substantive law modifications. This procedure gives a means for circumventing the deadline

    		•
  • Q : Define Overhead Unit Overhead Unit :

    Overhead Unit: The organizational unit which benefits the production of an article or a service however that can’t be directly related with an article or service to share out all of its expenditures to elements and/or work authorizations. The co

    		•
  • Q : Describe Schedule 7A Schedule 7A : The

    Schedule 7A: The summary version of the State Controller’s Office detailed Schedule 8 position register for each department. The information replicated in this schedule is the base for the “Salaries and Wages Supplement” exhibited on

    		•
  • Q : Explain Budget—Program or Traditional

    Budget—Program or Traditional: A program budget states the operating plan in terms of the costs of activities (that is, programs) to be undertaken to attain particular goals and objectives. A traditional (or object of expenses) budget expresses

    		•
  • Q : What do you mean by the term Year of

    Year of Appropriation (YOA): It refers to the initial year of an appropriation.

    		•