Aggregate Demand and Aggregate Supply

User Generated

DhrraT6

Economics

Description

Analyze why the economy may operate below full-employment GDP in the short run. How can the multiplier have a negative effect? ORIGINAL REQ 

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

The difference between real GDP and Current GDP is what constitute the difference in long-run and short-run GDP. in the short-run the resources that are not being fully utilized by the economy hence current gross domestic product is lower than that observed in the long-run.

 A multiplier is an element of proportionality that elaborates the change commissioned by an endogenous variable on another exogenous variable. a money multiplier will be affected negatively if the central bank increase the commercial banks' borrowing rates the money supply in the economy will go down.



Anonymous
Nice! Really impressed with the quality.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4