Draw graphs showing recessionary and inflationary gaps and explain how these gaps emerge.
Answer to relevant QuestionsWhat is a tax multiplier? How does it differ from the income multiplier? Calculate the following rates of unemployment and size of the labor force from the following data: frictional unemployment = 20; structural = 30; cyclical = 40; discouraged workers = 10; under employed = 25; employed workers ...What is meant by capital deepening? How does it affect labor productivity? Give an example. How does the law of diminishing returns come into play? What is "near" money? Explain how a new demand deposit of $100 can potentially create $500 of new money if the legal reserve requirement is 20 percent.
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