Question

What are the monetary policy to correct inflationary gap and deflationary gap​

Answer 1

Answer:

For the gap to be considered inflationary, the current real GDP must be higher than the potential GDP. Policies that can reduce an inflationary gap include reductions in government spending, tax increases, bond and securities issues, interest rate increases, and transfer payment reductions.

Answer 2

Answer:

For the gap to be considered inflationary, the current real GDP must be higher than the potential GDP. Policies that can reduce an inflationary gap include reductions in government spending, tax increases, bond and securities issues, interest rate increases, and transfer payment reductions.

Explanation:

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