Homework answers / question archive / The table shows several possible situations for the economy in terms of output gaps and the rate of change of wagen Real GDP is measured in billions of dollars

The table shows several possible situations for the economy in terms of output gaps and the rate of change of wagen Real GDP is measured in billions of dollars

Economics

Share With

The table shows several possible situations for the economy in terms of output gaps and the rate of change of wagen Real GDP is measured in billions of dollars. Assume that potential output is $800 billion. Output Gap Shift of AS Curve Situation A B ? D E F G H ? Real GDP 775 785 795 800 805 815 825 835 Rate of Wage Change -2.0% -1.2% -0.2% 0.0% 1.0% 2.4% 4.0% 5.8% a Compute the output gap (YY) for each situntion. b. For each situation, explain whether the economy's AS curve is shifting up, shifting down, or stationary