c) If the full employment income level is RM3,500, is there an inflationary gap or a deflationary gap? Draw a diagram to show the situation.(4 marks)

Question

c) If the full employment income level is RM3,500, is there an inflationary gap or a deflationary gap? Draw a diagram to show the situation.(4 marks)
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Solution 1

To answer this question, we first need to understand what an inflationary gap and a deflationary gap are.

  1. Inflationary Gap: This occurs when the total spending exceeds the production of goods and services at full employment level. This leads to an increase in the price level (inflation).

  2. De Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study prob

Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solve study problem.
Knowee AI StudyGPT is a powerful AI-powered study tool designed to help you to solv

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