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What is an inflationary gap

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Reference no: EM132320313

1. What is an inflationary gap? What causes it? What is the Keynesian policy prescription for addressing it?

2. What is the expenditure multiplier? What is its significance for Keynesian economics?

3. Explain the term "Potential GDP" Briefly discuss potential GDP in the neoclassical model, including how the curve is shown, what it determines, and how it operates over time.

4. Is the neoclassical long-run aggregate supply curve consistent with the Phillips curve?

5. What is the effect on the Aggregate Demand Curve of an increase in the price level? Explain your answer.

Reference no: EM132320313

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