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.
The hypothetical information in the following table shows what the economic situation will be in 2015 if the Fed does not use monetary policy: Year Potential GDP Real GDP Price Level 2014 $15.2 trillion $15.2 trillion 110.0 2015 $15.6 trillion $15.8 trillion
The country’s balance of trade is Rs.500 crores. The value of exports of goods is Rs. 650 crores. What is the value of imports of goods?
Reallocation of resources: In case, the market economy fails or does not attain the desired social objectives, the government has to interfere via budget and reallocate resources accordingly. Through its budgetary
When this market starts in equilibrium at point e on S0D0 and then young American families rousingly “inherit” furniture as their baby-boomer parents shift into smaller retirement homes, then this market will tend to shift in the direction of: (i) point i.
Meaning of Cash Reserve Ratio (CRR): It is the percentage of net or total deposits of commercial bank that are maintained by RBI.
A tax will be backward-shifted totally when the: (i) demand curve is vertical and the supply curve is slopes up. (ii) demand curve slopes down and the supply curve is vertical. (iii) supply curve is perfectly elastic and the demand cu
Describe why businessmen mostly wish to open current account in bank?
Use economic theory to explain the inflation movements and factors influencing it. Use relevant models to explain the impact of changes in fiscal and monetary policies in curtailing inflation.
Elucidate the basis of categorizing government receipts into revenue receipts and capital receipts. Answer: Revenue Receipts: The government revenue receipts are such receipts A) that neither makes liability
Illustrate a point on consumption curve at which APC = 1. Answer: APC = C/Y = 1 is possible when C = Y, that is, Consumption is
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