Question

Which monetary measure is to be adopted in connecting Inflationary Gap ?

Answer 1

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The difference between the two is EB (BM – EM) which is a measure of inflationary gap or excess demand. In short, the inflationary gap is the amount by which the actual aggregate demand exceeds the aggregate demand required to establish full Output and Income employment equilibrium.

Answer 2

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The difference between the two is EB (BM – EM) which is a measure of inflationary gap or excess demand. In short, the inflationary gap is the amount by which the actual aggregate demand exceeds the aggregate demand required to establish full Output and Income employment equilibrium.