GDP gap
"The economic cost of unemployment is measured by the GDP gap." Explain this statement. ?
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The GDP gap refers to the gap between current GDP and the GDP that corresponds to full employment level. The latter is also called the ‘potential GDP’. When there is unemployment the economy is unable to produce at potential level and the shortfall is the cost that the economy pays in economic terms. This is the cost in economic terms as it is the ’economy’s’ loss. There are other costs of unemployment, but they are personal and restricted to the unemployed person and his family.
In the figure shown below, line T0 depicts a tax system which is: (1) Progressive. (2) Regressive. (3) Proportional. (4) Unbiased. (5) Recessive. Q : Business cycle What is meant by the What is meant by the term business cycle as described by economists?
What is meant by the term business cycle as described by economists?
What do you mean by the term Equilibrium? Also state its proper definition.
Predictions which restricting international trade to protect specific industries and “infant” firms would (a) inefficiently decrease aggregate output and employment, (b) raise the market power of the protected firms and their workers, and
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Elucidate the concept of deflationary gap. Answer: Deflationary gap is the deficit in aggregate demand from the level needed to maintain full employment equilibrium
Assume that the launch of Microsoft Xbox 360 moved the demand curve for Sony PlayStation 2 games from D0 to D1 throughout similar period if new game designers enter into this market and hence supplies of PlayStation 2 games shifted S0 to S1. The market equilibrium: (1
IN which situation, there is a deficit in the balance of trade.
Possibilities Food (millions of tons per year) Tractors (millions per year) A 0 30 B 4 28 C 8 24 D 12 20 E 16 14 F 20 8 G 24 0 a. Is it possible for this nation to produce thirty million tons of food per year? Why or why not. b. Is it possible for this nation to produce thirty million
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