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Home/Business & Economics/Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)?

Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)?

An inflationary market gap will start to occur in the country. An inflationary market gap occurs when the real GDP exceeds its potential GDP. The hypothetical country is experiencing an increasing stock price, and the value of investments and the benefits are increasing substantially. The rising stock prices and investment values will increase the country’s real GDP until it exceeds the potential GDP of the hypothetical count. As in the hypothetical country, the demand for the product will be much higher than the number of products and services that can be supplied to the country as citizens will have acquired massive wealth following the increased value of their investments.

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Academic.Tips. (2022) 'Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)'. 3 November.

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Academic.Tips. (2022, November 3). Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)? https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-3/

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Academic.Tips. 2022. "Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)?" November 3, 2022. https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-3/.

1. Academic.Tips. "Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)?" November 3, 2022. https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-3/.


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Academic.Tips. "Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)?" November 3, 2022. https://academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-3/.

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"Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of economic gap will start to occur (inflationary or recessionary)?" Academic.Tips, 3 Nov. 2022, academic.tips/question/suppose-the-economy-of-a-hypothetical-country-has-reached-its-long-run-macroeconomic-equilibrium-when-each-of-the-following-aggregate-demand-shocks-occurs-the-economy-of-a-hypothetical-country-has-b-3/.

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Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs. The economy of a hypothetical country has been stable for two or three years with deficient unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples' investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their newfound wealth to buy things that they had been hesitant to purchase in the past. What kind of fiscal policy might be helpful to stabilize the economy (expansionary or contractionary)?
If COVID-19 had never happened, which challenge would have been Gusto 54’s largest barrier to continued growth? How would you suggest the group tackle this challenge?
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