Economics
Aggregate Demand and Aggregate Supply

Question 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 

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final 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.


teamnosleep (489)
UIUC

Anonymous
Nice! Really impressed with the quality.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4