Naren Mohan Ramesh

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Based on theoretical and factual considerations, we can postulate: 1. When ADSGAP > 0, AD exceeds AS. The economy is overheated and inflation tends to rise. 2. When ADSGAP < 0, AD is less than AS. The economy has slack and inflation tends to fall. 3. When ADSGAP = 0, AD = AS. The economy is in LRE.
Applied Macroeconomics: Employment, Growth and Inflation
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