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10 marksBasic Keynesian Models

CAPE Economics Unit 2 · 2010 · Paper 2 · Question 2(a)(i)

Using the Keynesian 45° graphs, explain the difference between the 'recessionary gap' and the 'inflationary gap'.

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Other parts of this question

  1. 2(a)(ii)Using the Classical Model, explain why disequilibrium employment exists.[5 marks]
  2. 2(b)(i)Define the term 'investment'.[2 marks]
  3. 2(b)(ii)Describe FOUR factors that influence investment.[8 marks]

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