Answer to Question #59606 in Macroeconomics for ali
AD: P = 48 - 2Y.
AS: P = 8.
PO: Y = 16.
What is the Inflationary Gap
Y (actual GDP) =20
When actual GDP is above the potential GDP the economy has positive output gap, also called as inflationary gap.
Inflationary Gap = Actual GDP- Potential GDP=20-16=4
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