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Answer to Question #319930 in Macroeconomics for tani

Question #319930

Is there an inflationary or deflationary gap and what is the size?

1
Expert's answer
2022-03-29T12:37:54-0400

Inflationary gap is the amount by which the actual aggregate demand exceeds aggregate supply at level of full employment whereas deflationary gap is the amount by which actual aggregate demand falls short of aggregate supply at level of full employment. The figures below show the inflationary and deflationary gaps respectively.








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