J
Jinnentonix
Member
Hi there
I have a question about this concept.
The book says that the 'full-employment level of GDP (Yf) is the level of GDP at which there is no deficiency of aggregate demand (E)'.
Then it says that 'the recessionary (deflationary) gap shows by how much aggregate demand is deficient at the full-employment level of income'.
These two statements appear to be inconsistent. If one says that there is no deficiency of aggregate demand at a certain level of GDP, how can it be the case in the sentence below that there can be?
What am I missing?
I have a question about this concept.
The book says that the 'full-employment level of GDP (Yf) is the level of GDP at which there is no deficiency of aggregate demand (E)'.
Then it says that 'the recessionary (deflationary) gap shows by how much aggregate demand is deficient at the full-employment level of income'.
These two statements appear to be inconsistent. If one says that there is no deficiency of aggregate demand at a certain level of GDP, how can it be the case in the sentence below that there can be?
What am I missing?