Inflationary deflationary gapDeflationary gap the amount by which aggregate demand must be increased to raise the equilibrium level of national income to its full employment level. Inflationary gap the amount by which aggregate demand must be decreased in order to bring the equilibrium income down from equilibrium level of national income to full employment level with stable prices.G a p sSuppose Yfe is the full employment equilibrium level of outputYC, I, GABinflationary gapdeflationary gapYfeaggregate demandInflationary GapThe notion is that if planned aggregate demand exceeds full employment output there will be upward pressure on prices (demand pull inflation)YC, I, GABinflationary gapdeflationary gapYfeaggregate demandDeflationary GapIf aggregate demand is less than the full employment output there will be downward pressure on prices (prices reduced to sell)YC, I, GABinflationary gapdeflationary gapYfeaggregate demandGaps PolicyInflationary Gap: use monetary fiscal policy to reducggregate Supply)AD1Changes In Aggregate Expenditure (Keynesian Cross Model)YEEC + I + G + (X-M)YeEeEeYe=(Aggregate Supply)(Aggregate Demand)AD1Changes In Aggregate Expenditure (Keynesian Cross Model)YEEC + I + G + (X-M)YeEeAD1AD2(Aggregate Supply)(Aggregate Demand)EInfChanges In Aggregate Expenditure (Keynesian Cross Model)YEEC + I + G + (X-M)YeEeE1EInfEe(Inflationary Gap)EInfY1AD1AD2(Aggregate Supply)(Aggregate Demand)PInventories=IChanges In Aggregate Expenditure (Keynesian Cross Model)YEEC + I + G + (X-M)Y3E3EDefEDefE1(Deflationary Gap)Y1E1AD3AD2(Aggregate Supply)(Aggregate Demand)PInventories=IChanges in Government PurchasesThere are two macroeconomic effects from the change in government purchases: The multiplier effect The crowding-out effectThe Multiplier EffectGovernment purchases are said to have a multiplier effect on aggregate demand. Each dollar spent by the government can raise the aggregate demand for goods and services by more than a dollar. spending income A portioncrease in government purchases of $20 billion initially increases aggregate demand by $20 billion…$20 billionAD32. …but the multiplier effect can amplify the shift in aggregate demand.A Formula for the Spending MultiplierThe formula for the multiplier is: Multiplier = 1/(1 - MPC) ref. (mpc+mps=1) An important number in this formula is the marginal propensity to consume (MPC). It is the fraction of extra income that a household consumes rather than saves.If the MPC is 3/4, then the multiplier will be: Multiplier = 1/(1 - 3/4) = 4 In this case, a $20 billion increase in government spending generates $80 billion of increased demand for goods and services.Multiplier = 1/(MPS+MPT+MPM) Taxation and expenditure on imports affect the size of the multiplier.The Accelerator PrincipleSuppose aggregate demand has increased Produce the increased output they need to invest in expansions of their factories, workshops and warehouses. In other words, the amount of investment will depend on the rate celerator Principle.The Accelerator Principle is not a part of the Keynesian model. Paul Samuelson Because production is increasing, businessmen have to invest more to keep up with their orders. But this greater investment also has a multiplier effect, so it causes production to increase further -- which requires a still higher rate of investment -- which brings about still more increase in production.This mutual reinforcement of the multiplier and the accelerator cannot go on forever, but it could explain why booms can go on for several years at a time. It can also explain why a bust comes when production levels off.With production steady, businessmen don't need to invest much at all -- just enough to replace their production capacity as it wears out -- and this means investment could drop almost to zero, even though production is stable at a pretty high level. The accelerator probably is one of the factors influencing investment, and for practical applications, we should keep it in msion : the growth slows down and investment, production and employment are reduced. Slump : heavy unemployment, unused industrial capacity. Recovery : investment, production and employment pick up and business confidence returnsThe Accelerator Principle is not, itself, a part of the Keynesian model. Economists had written about it before Keynes' work, and Keynes had his doubts about it! But Keynesian economists of the generation after Keynes, especially Paul Samuelson, put the accelerator and the multiplier together. Let's see what happens:Of course, this mutual reinforcement of the multiplier and the accelerator cannot go on forever, but it could explain why booms can go on for several years at a time. It can also explain why a bust comes when production levels off. With production steady, businessmen don't need to invest much at all -- just enough to replace their production capacity as it wears out -- and this means investment could drop almost to zero, even though production is sta}
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[경제학원론] 경제학원론 Inflationary & deflationary gap
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[영문이력서 및 소개서] 영문자기소개서
