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An expansionary gap is a negative output gap, which occurs when actual output is higher than potential output.
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∙ 15y ago
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What do you refer to when actual output is higher than potential output?
expansionary output gap has occured.
What is the definition of expansionary fiscal policy?
Expansionary fiscal policy refers to policies aimed at increasing demand and thus output. This is done by expanding/increasing government expenditure, reducing taxes or doing a bit of both.
What does a contractionary gap imply about the actual rate of unemployment relative to the natural rate of unemployment?
Assume certeris paribus, an expansionary gap is where real GDP is above the full employment, and a contractionary gap is where real GDP is below the full employment.
What is expansionary mode?
Expansionary mode is the growth of the economy during a recession
Why does the government sometimes use an expansionary fiscal policy?
to encourage growth and try to stop or prevent a recession
What word belongs to this definition move across a gap?
If it's a synaptic gap then the answer would be neurotransmitter.
What is the definition of contractionary gap?
A contractionary gap occurs when an economy's actual output is less than its potential output. This leads to high unemployment and underutilization of resources. Policymakers may implement contractionary monetary or fiscal policies to close this gap and bring the economy back to full employment.
Who determines the expansionary period?
The fed
Why would an expansionary gap lead to a change in inflation Why would a recessionary gap lead to a change in inflation?
Assuming that the aggregate demand curve does not move, the only way for the gap to be closed is by a shift in aggregate supply. These gaps cause a change in inflation expectations, moving the AS curve left (exp) or right (rec) back to long term equilibrium and changing the inflation rate.
What is the definition of income gap?
The income gap is the gap between the rich and the poor. We call that gap the middle class.
Expansionary fiscal policy?
is a policy that have no demand
What is the definition for Gap in math terms?
the distance between two or more numbers
