Asked by Lionell Martin Jr on Apr 29, 2024
Verified
If equilibrium GDP is $900 billion greater than full employment GDP and there is a deflationary gap of $300 billion,how much is the multiplier?
Deflationary Gap
A situation where aggregate demand is less than the total supply of goods and services, leading to deflation and unemployment.
Equilibrium GDP
The level of Gross Domestic Product at which aggregate supply equals aggregate demand, indicating a stable economy.
Full Employment GDP
Full Employment GDP is the output level produced by an economy when all its labor and resources are employed at their maximum efficiency.
- Execute the application of the multiplier effect in economic situations, with an emphasis on its repercussions on Gross Domestic Product.
- Determine the balance of Gross Domestic Product relative to the optimum employment Gross Domestic Product and appreciate the consequences of differential gaps.
Verified Answer
SK
Learning Objectives
- Execute the application of the multiplier effect in economic situations, with an emphasis on its repercussions on Gross Domestic Product.
- Determine the balance of Gross Domestic Product relative to the optimum employment Gross Domestic Product and appreciate the consequences of differential gaps.