wireman Posted June 4, 2012 Report Share Posted June 4, 2012 (edited) Assume an economy that had a growth rate of 8% throughout 2009, growth rate of 7% throughout 2010 and a growth rate of 6% throughout 2011. If this trend continues, ceteris paribus, how can we depict the position of this economy on its business cycle? It would be on the ascending part before a boom right? Because its not growth that's reducing, its the growth rate?Plus, if I were to draw an AD/AS diagram, with AD and AS moving left and right, I would finally have GDP equilibrium more than the previous GDP equilibrium right? Although in decreasing ratios. Am I correct with this?Thank you. Edited June 4, 2012 by wireman Reply Link to post Share on other sites More sharing options...
Dew Posted June 4, 2012 Report Share Posted June 4, 2012 you are correct on both mate! 2 Reply Link to post Share on other sites More sharing options...
wireman Posted June 4, 2012 Author Report Share Posted June 4, 2012 One more question. The economy would be experiencing an inflationary gap right? Reply Link to post Share on other sites More sharing options...
Summer Glau Posted June 4, 2012 Report Share Posted June 4, 2012 Yes, since inflation is occurring. 2 Reply Link to post Share on other sites More sharing options...
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