I defined spare capacity, I drew the pbb and put point x inside the pbb saying that it shows spare capacity exists, I then spoke about how fiscal supply side policy such as increased spending on education shifts the lras to the right , I drew that too and then I said that inflation is decreasing from pl1 to pl1 and that this also makes us more internationally competitive
Please tell me you also got something similar
the question asked, how a reduction in spare capacity(meaning increased output) will impact inflation.
the question asked, how a reduction in spare capacity(meaning increased output) will impact inflation.
Yes I thought I might have misinterpreted slightly .. However I still explained it by saying growth demand strips supply and how actual growth would exceed trend and the whole positive output gap malarkey.. I know i won't get full marks but hopefully close to it ..
People who did Context 2, did any of you use the Keynesian Long-run Aggregate Supply curve to show how the price level (inflation) rises when the economy nears it's productive potential??
Damn for context 2 12 marker, I said that lras will shift to the left and Ad will shift inwards , due to miss match in skills. Would I get any marks at all ????? Please god help me
Damn for context 2 12 marker, I said that lras will shift to the left and Ad will shift inwards , due to miss match in skills. Would I get any marks at all ????? Please god help me