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Suppose an economy has an inflationary gap. a. Illustrate this using a graph with LRAS, SRAS, and AD curves. Identify the equilibrium price level, real GDP, and the output gap in your
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Inflationary gap
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Explain the concept of Inflationary Gap. Explain the role of Repo Rate in reducing this gap.ORExplain the concept of Deflationary Gap and the role of Open Market Operations in reducing this gap.
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Inflationary and deflationary gaps
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Distinction between Inflationary and Deflationary Gap at the Equilibrium Level of Income
22.3 Recessionary and Inflationary Gaps and Long-Run Macroeconomic Equilibrium – Principles of Economics