Explore Westonci.ca, the premier Q&A site that helps you find precise answers to your questions, no matter the topic. Get immediate and reliable solutions to your questions from a knowledgeable community of professionals on our platform. Connect with a community of professionals ready to help you find accurate solutions to your questions quickly and efficiently.
Sagot :
Everything else is held constant, when output is below the natural rate level, wages will begin to fall and increase short.
The difference between an economy's actual and prospective output is quantified by the term "output gap" in economics. When an economy is operating at maximum efficiency, or when it is at capacity, potential output refers to the total amount of products and services it can produce.
The productive capacity of the economy is frequently used interchangeably with potential output.
A positive gap develops in a boom when output exceeds its potential level. It is common to refer to the economy in this situation as "overheating," which pushes inflation higher and may force the central bank to "cool" the economy by increasing interest rates.
When the output is below the natural rate level, wages start to decline and increase too slowly, all other things being equal.
To learn more about Inflation refer to:
https://brainly.com/question/28136474
#SPJ4
We hope our answers were useful. Return anytime for more information and answers to any other questions you have. We hope this was helpful. Please come back whenever you need more information or answers to your queries. Find reliable answers at Westonci.ca. Visit us again for the latest updates and expert advice.
