Stagflation

Q: Economic activity fluctuates in the short-run. Why is this the case?

A: Economic activity fluctuates in the short-run In the short run, An outward shift in the aggregate…

Q: Give an example of an event which causes the economy to go from point D to point B in the long run.

A: The above graph shows the short run and long run equilibrium of an economy.

Q: Draw a graph where inflation falls and GDP increases.

A: The aggregate demand curve(AD) is a downward-sloping curve showing all the different combinations of…

Q: Deflation refers to a situation where price level falls price level rises the rate of inflation…

A: Deflation is one of the components of the business cycle. The business cycle refers to those…

Q: Aggregate demand is the total quantity of output     A)consumers actually buy.    B) producers are…

A: Aggregate demand is the sum of four components: consumption, investment, government spending, and…

Q: Following a demand-side recession, what happens to full employment GDP (C+I+G) after a few…

A: When talking about demand-side recession, it is the situation when people reduces their demand for…

Q: All of the following are included in the investment component of aggregate demand except purchase of…

A: Consumption, Investment, government spending and net exports are components of aggregate demand.

Q: a given year, nominal GDP increased by about 2.5%. Over that year, the GDP deflator decreased by…

A: With nominal GDP increased by about 2.5 % and at the same time GDP deflator decreased by 4 %, then…

Q: If nominal GDP rises: real GDP must fall. real GDP must also rise. real GDP may either rise or fall.…

A: Nominal GDP is the value of the basket of all goods and services at the current year prices. So,…

Q: Consider the exhibit below for the following questions. Figure 33-4 O Refer to Figure 33-4. If the…

A: Aggregate demand is the sum of consumption,  investment,  government spending and net export. This…

Q: State the main components of the aggregate demand in the economy

A: According to the given question Aggregate demand is initially known as the total amount of the…