How would you explain the effect that the recessionary gap, or the effect that the inflationary gap would have on the definition

Question

Vlad [161]

3 years ago

13

How would you explain the effect that the recessionary gap, or the effect that the inflationary gap would have on the definition

of macroeconomics shown in EXGA criteria?

Business

1 answer:

gulaghasi [49] · Answer 1 · 2022-07-30T10:19:08+03:00

A recessionary gap happens when an economy is falling into a recession, which is defined as a lower real level of income, as measured by real GDP, then the full-employment level. An economic recession can happen in a number of ways, including a higher nominal exchange rate, which reduces net exports and domestic income, and a large reduction in consumer expenditure or investment due to a decrease in take-home pay by workers.