What is the output gap? How does it change when the economy goes into recession?
What will be an ideal response?
The output gap equals the difference between real GDP and potential GDP. When the economy goes into a recession, the output gap becomes negative.
Economics
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For this question, assume that the aggregate production function is represented by Y = A. Which of the following represents the marginal cost of producing an additional unit of output?
A) W B) W/A C) A/W D) (1 + A)W E) 1/W
Economics
Which of the following would lead to stagflation?
a. demand-pull inflation b. cost-push inflation c. both of the above d. none of the above
Economics