--%>

Surplus of AD over AS-Inflationary gap

Does a surplus of AD over AS always entail a condition of inflationary gap?

Answer: No. Inflationary gap takes place only if AD > AS equivalent to full employment level of employment.

   Related Questions in Macroeconomics

  • Q : Maximum Consumer Surplus Assume that

    Assume that you receive $18 worth of ‘jollies’ (that is, utility, satisfaction or pleasure) from the very first hole of golf played on a particular day, and that your extra jollies from succeeding the holes drops $1 for each and every hole played. You shou

  • Q : Fiscal and monetary policies in

    Explain the impact of changes in fiscal and monetary policies in curtailing inflation?

  • Q : Calculating exchange rate for USA dollar

    If $9 is required to buy £2, what is the exchange rate for USA dollar? Answer: £1 = 9/2 = $4.5, i.e., £1 = $4.5.

  • Q : Substitution Effect explanation Can

    Can someone help me in finding out the right answer from the given options. The substitution effect is fully explained when: (i) Brandon just eat tofu since he is on a diet. (ii) A rise in the price of corn chips drives up demand for the salsa. (iii)

  • Q : Self consumption-Value of output

    Illustrate whether output generated for self consumption is comprised or not comprised in the value of output? Answer: The output generated for self consumption is

  • Q : Policy proposals influencing market for

    How would your policy proposals influence the market for parking?

  • Q : How central bank reduce the

    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

  • Q : Define Break Even point Define Break

    Define Break Even point? Elucidate with the help of saving function. Answer: Breakeven point is a point where consumption equals to income and saving is equivalent t

  • Q : Profit sharing plan For the firm, the

    For the firm, the major goal of profit sharing plans is to:

  • Q : Tax shifting backward totally A tax

    A tax will be backward-shifted totally when the: (i) demand curve is vertical and the supply curve is slopes up. (ii) demand curve slopes down and the supply curve is vertical. (iii) supply curve is perfectly elastic and the demand cu