Sofia

What Is an Output Gap?

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The output gap is the difference between an economy’s potential output and its actual output. Potential output is the maximum amount of goods and services an economy can produce when all of its resources are being used efficiently. Actual output is the amount of goods and services the economy is actually producing. The output gap … Read more

M1 money supply: how it works and how to calculate it.

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. How to Calculate M1 Money Supply What are the four measures of money supply? M0: Physical currency in circulation, plus deposits at central bank M1: M0 plus checking account deposits M2: M1 plus savings and money market account deposits M3: M2 plus large-time deposits and institutional money market funds How is money supply measured … Read more