Business, 09.03.2020 23:38 gennhill14

According to Keynes, what type of economic policy is needed to return the economy to full employment when there is either a recessionary or inflationary gap?

A. A recessionary gap requires less government spending as does an inflationary gap.
B. A recessionary gap requires more government spending and an inflationary gap requires less government spending.
C. A recessionary gap requires less government spending and an inflationary gap requires more government spending.
D. A recessionary gap requires more government spending as does an inflationary gap.

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Answer from: kingoc321

Option (B) is correct.

Explanation:

A recessionary gap is a situation in which the equilibrium level of real GDP is less than the full employment level. In this condition, the aggregate demand is lower and there is a shortage of aggregate demand. This shortage of aggregate demand will be corrected if there is an increase in the government spending or decrease in the taxes. This would increase the aggregate demand in the economy, and therefore, increase the real GDP and achieve the full employment level.

An inflationary gap occurs when the equilibrium level of real GDP is greater than the full employment level. There is a higher level of aggregate demand in the economy, so there is a need to lower down the government spending or to raise taxes in order to reduce the aggregate demand. This lower level of aggregate demand reduces the real GDP and achieve the full employment level.

Answer from: Quest

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7. customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

your welcome leave a rate and a < 3

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Businesses are required to follow laws and regulations, but they choose to follow ethical standards in a code of ethnics.answer: d) or the fourth option.

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According to Keynes, what type of economic policy is needed to return the economy to full employment...

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