Theory of Employment, Output, Inflation, Money and Finance-The Inflationary Gap (IEcoS (Economic Services) Economics Paper-2): Questions 1 - 4 of 4

Access detailed explanations (illustrated with images and videos) to 82 questions. Access all new questions we will add tracking exam-pattern and syllabus changes. Subscription can be renewed yearly absolutely FREE! View Sample Explanation or View Features.

Rs. 300.00 or

How to register?

Question number: 1

» Theory of Employment, Output, Inflation, Money and Finance » The Inflationary Gap » Demand Pull Versus Cost Push Inflation

Edit

Appeared in Year: 2011

Essay Question▾

Describe in Detail

Explain the concept of inflationary gap.

Explanation

Inflationary gap arises when consumption and investment spending together is greater than the full employment GNP level.

  • This means that people are demanding more goods and services than can be produced.

  • In other words, the amount by which the actual aggregate demand exceeds the level of national income corresponding to full employment is

… (134 more words) …

Question number: 2

» Theory of Employment, Output, Inflation, Money and Finance » The Inflationary Gap » Demand Pull Versus Cost Push Inflation

Edit

Appeared in Year: 2017

Essay Question▾

Describe in Detail

Compare and contrast demand pull and cost push inflation.

Explanation

Demand pull inflation refers to a situation in which aggregate demand at the existing price level far exceeds aggregate supply of goods and services. Such inflation occurs due to excessive demand. Factors responsible for this:

  • The major source of inflation is increase in money supply in the economy.

    Increase in money supply results from an

… (519 more words) …

Question number: 3

» Theory of Employment, Output, Inflation, Money and Finance » The Inflationary Gap » Philip's Curve and Its Policy Implication

Edit

Appeared in Year: 2015

Essay Question▾

Describe in Detail

The following functions are estimated for an economy:

Consumption Function:

Investment Function:

Government Purchases:

Real demand for money:

Real money supply:

Now Estimate the equation for the IS curve and the LM curve. Also find out the equation of AD curve. Find equilibrium values of P, r, C and I.

Explanation

a) Is equation

… (127 more words) …

Question number: 4

» Theory of Employment, Output, Inflation, Money and Finance » The Inflationary Gap » Philip's Curve and Its Policy Implication

Edit

Appeared in Year: 2015

Essay Question▾

Describe in Detail

The following functions are estimated for an economy:

Consumption Function:

Investment Function:

Government Purchases: G = 200

Taxes: T = 0·2Y

Real demand for money:

Nominal money supply:

Now Estimate the equation for the IS curve and the LM curve. Thereafter, solve the system for equilibrium level of real income and real interest rate.

Explanation

a) IS equation

… (116 more words) …

Developed by: