Assignment 2 - case of a recessionary and inflationary gap?...

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UNIVERSITY OF CENTRAL PUNJAB Course Title: Principles Of Macroeconomics (E) Semester: Fall 2011 Instructor: Anum Ahmad Marks: 30 Due date and time: 10 th January, (8:00 am in class) Q1 Define Aggregate Demand. Why is the AD curve downward sloping? (Marks 10) Q2 What is a Built-In Stabilizer? How does a progressive tax system act as a built-in stabilizer in
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Unformatted text preview: case of a recessionary and inflationary gap? (Marks 10) Q3 In the UK, growth in the retail sales in the year ending June 1998 was so high that it caused inflation in UK. The central bank decided to raise interest rates to prevent inflation. How will the central bank raise interest rates? (Marks 10)...
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