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An economy is facing the inflationary gap shown in the accompanying diagram. a. To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? b. How will the interest
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Inflationary and deflationary gaps
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![Inflationary and Deflationary gap [A Level]](https://www.dineshbakshi.com/images/stories/economics_diagrams/deflationary-gap.jpg "Inflationary and Deflationary gap [A Level]")
Inflationary and Deflationary gap [A Level]
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Assume that the economy is currently in short run equilibrium but is experiencing inflationary gap. If you are a Keynesian economist and believe that economy is NOT self-regulating under these circums
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Inflationary Gap
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Inflationary and deflationary gaps
