Ask Question
28 September, 13:37

In the figure, the inflationary gap when AD2 is the aggregate demand curve equals

+3
Answers (1)
  1. 28 September, 14:01
    0
    The complete question is

    In the above figure, the inflationary gap when AD2 is the aggregate demand curve equals

    A) the difference between 110 and 100.

    B) the difference between $12.5 trillion and $12.0 trillion.

    C) LAS minus SAS at a price level of 100.

    D) AD1.

    The Answer is option B the difference between $12.5 trillion and $12.0 trllion.

    Explanation:

    The inflationary gap is calculated by subtracting anticipated GDP from real GDP of the economy. The x-axis represent the national income and y-axis represent the expenditure.

    It is the excess of aggregate demand over its level required to maintain full employment equilibrium in the economy. in the figure AD2 represents the aggregate demand curve.

    Thus, inflationary gap when AD2 is aggregate the demand curve equals the difference between $12.5 trillion and $12.0 trillion.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “In the figure, the inflationary gap when AD2 is the aggregate demand curve equals ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers