看向世界SpotWorld: Macroeconomic chapter 6

Chapter 5

Three states of economy

· Recessionary Gap紧缩缺口

· Inflationary Gap通货膨胀缺口

· Long-run Equilibrium

Recessionary Gap / deflationary Gap

紧缩缺口

Refer to the situation when under full employment economy, the investment rate less than saving, aggregate supply over demand.

=Real GDP < Natural real GDP

Method to overcome:

· Decrease tax.

· Increase government expenses.

· Lower interest rate.

· Increase investment.

Effect:

· Decrease in income/salary.

· Decrease in production.

· Decrease in the employment rate

Inflationary Gap通货膨胀缺口

Refer to the situation when under full employment economy, the investment more than saving, aggregate demand oversupply.

=Real GDP > Natural real GDP

Method to Overcome:

· Increase tax.

· Decrease investment.

· Increase interest rate.

· Decrease government expenses.

Effect:

· Slightly increase in the price level

· Slightly increase in the employment rate

Long run Equilibrium

Refer to the situation when under full employment economy, the investment rate balance equal with saving, demand equal to supply.

=Real GDP is Equal to Natural real GDP

More Info:

从零开始的马来西亚虚拟Virtual Youtuber ——Kimily紀鴍樂
👉https://spotthewrld.blogspot.com/2020/12/virtual-youtuber.html👈

Financial Management - Types of bonds
https://spotthewrld.blogspot.com/2021/04/financial-manamement-types-of-bonds.html

看向世界SpotWorld