(A) Using a Graph Showing Aggregate Demand, Short-Run Aggregate Supply

question 2

Essay

(a) Using a graph showing aggregate demand, short-run aggregate supply, and long-run aggregate supply, illustrate an economy that faces a recessionary gap. (b) Explain how the recessionary gap can be eliminated and evaluate the possibilities.

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Definitions:

External Environment

The outside factors and influences that affect the operation and performance of an organization.

Centralize

Refers to the process of concentrating decision-making authority and control at the top levels of an organization.

Tall Hierarchies

Organizational structures with multiple levels of management and authority, sometimes leading to slower decision-making processes.

Employee Empowerment

Practices that give employees more autonomy, responsibility, and authority over their work, aiming to increase engagement and productivity.