How does an economy get out of an inflationary gap?(use a graph.)

How should I draw a graph of the economy in a recessionary (or inflationary) gap situation...

How should I draw a graph of the economy in a recessionary (or inflationary) gap situation on the graph and show how expansionary (or contractionary) fiscal policy works?

assume the economy is currently experiencing an inflationary gap or expansion . using a graph explain...

assume the economy is currently experiencing an inflationary gap or expansion . using a graph explain how econmy can return to full employment in the long run without any government inventions

An open economy is currently in an inflationary gap. In attempt to reduce the inflationary pressure,...

An open economy is currently in an inflationary gap. In attempt to reduce the inflationary pressure, the central bank decides to adjust the target for overnight rate to close the inflationary gap. What should the central bank do?. Also, describe how the monetary transmission mechanism works for the proposed change in monetary policy.

Is a recessionary or inflationary gap bad for an economy? Have you ever wondered how the...

Is a recessionary or inflationary gap bad for an economy? Have you ever wondered how the federal government and the Federal Reserve react to smooth out recessionary and inflationary gaps? In this activity, you will explore the concepts of fiscal policy and the attempts the U.S. government takes when the U.S. economy is in a recessionary or inflation gap. You will discuss the concepts of aggregate supply and aggregate demand to determine how the U.S. economy can work its way...

Draw an AD/AS graph to demonstrate an economy that has come to rest in an inflationary...

Draw an AD/AS graph to demonstrate an economy that has come to rest in an inflationary gap. Label this equilibrium point 0. Describe how the Federal Reserve Bank could use open market operations (buy or sell treasury bonds) to cool the economy and describe the effect this has on bank T accounts. Show the effect of this policy on the AD/AS graph and explain what shifts, and why.

a. Suppose the economy is in an inflationary gap. If the correct monetary policy is used...

a. Suppose the economy is in an inflationary gap. If the correct monetary policy is used how will the Federal Reserve wish to change its interest rate target? b. Explain how the Fed, using open market operations, would do that. c. Then show, using the liquidity preference model(chapter 15), show how equilibrium interest rates and the money supply change(draw a graph).

Suppose an economy is in an inflationary gap. What can we infer about the unemployment rate?...

Suppose an economy is in an inflationary gap. What can we infer about the unemployment rate? It is above 4.5% It is equal to 4.5% It is below 4.5% Draw a graph with SRAS and AD that is operating at the short-run equilibrium AND in an inflationary gap. What must be true? RGDP produced = RGDP consumed RGDP produced > RGDP consumed RGDP produced < RGDP consumed Draw a graph with SRAS and AD that is operating at the short-run...

5. If there is a recessionary or an inflationary gap in the economy, what types of...

5. If there is a recessionary or an inflationary gap in the economy, what types of policies might the government invoke?

Assume the economy is in an inflationary gap. A. What action should the Fed take to...

Assume the economy is in an inflationary gap. A. What action should the Fed take to try to move the economy back to long run equilibrium? Is this contractionary or expansionary monetary policy? B. Briefly explain how this action by the Fed would affect the economy as a whole (AD/AS). Use graphs to illustrate your explanation.

Governments to get the economy out of recession or cool the economy down when the economy...

Governments to get the economy out of recession or cool the economy down when the economy is overheating often use fiscal policy.   1. What is fiscal policy?   2. How can it be used to get the economy out of recession? 3. How can it be used to get the economy out of the situation where the economy is in an expansionary period where we exceed long run potential?   4. Do both situations result on different impacts on inflation? Why or...