Homework Answers
"D"
Potential GDP is the level of GDP that the economy can attain where the firms in the market are producing at the full capacity, this is the highest level of output without increasing the inflation.
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Concept: Actual/Potential GDP Potential GDP O A. falls below actual real GDP in recessions. O B....
Potential real GDP is O A. the level of GDP attained when most firms are producing...
Potential real GDP is O A. the level of GDP attained when most firms are producing at capacity and unemployment is low. OB. the level of GDP attained when only some firms have excess capacity. O C. the level of GDP attained when all firms are producing at capacity. OD. the level of GDP attained when all firms have excess capacity Potential real GDP
34. All of the following will increase potential real GDP except a. an increase in the...
34. All of the following will increase potential real GDP except a. an increase in the amount of natural resources available. b. an increase in the percentage of the population that attends college. c. an increase in the cost of living (money prices). d. an improvement in technology. 35. Which of the following is not a problem associated with Real GDP as a measure of social welfare? a. It excludes intermediate goods as a separate entry. b. It does not...
What is potential GDP? O A) It is the level of real GDP in the long...
What is potential GDP? O A) It is the level of real GDP in the long run. OB) It is the difference between current GDP and maximum GDP. O C ) It is the level of real GDP in the short run. O D) It is the level of GDP at which inflation is constant.
la 5 If in 2018 US real GDP is $19 trillion and US nominal GDP is...
la 5 If in 2018 US real GDP is $19 trillion and US nominal GDP is $21 trillion. Which of the following is correct? 2018 is the base year. Price level in 2018 must be higher than base year level. O Quantity of final goods and services produced in 2018 must be higher than base year level. O Quantity of final goods and services produced in 2018 must be lower than base year level. 06
Which of the following suggest that real per capita GDP is not a perfect measure of...
Which of the following suggest that real per capita GDP is not a perfect measure of economic well-being? a. population varies across counties b. GDP does not measure the value-added created during home production c. GDP does not take into account the income distribution d. GDP underestimates the value of goods and services produced in the economy because of inflation e. GDP inaccurately measures the value of goods and services produced by the government When do we say that the...
target rate of inflation is 2 percent, the real GDP. If the weights for the 2...
target rate of inflation is 2 percent, the real GDP. If the weights for the 2 percent, the aurrent inflation rate is 4 percent, and real GDP is 2 percent above potential i inflation gap and the output gap are both 1/2, then according to the Taylor rule the equals 20) ) 4 percent. B)6perennt. C)8percent. D) 10 percent. Figure 11-2 Real GDP per hour worked, YIL oductior function, Production Production function Capital per hour worked, K/L $40 60 21)...
Suppose the current level of real GDP for an economy is below its potential level of...
Suppose the current level of real GDP for an economy is below its potential level of RGDP. Starting with this situation, and in the absence of any government action, what should next happen in the AD-AS model? Group of answer choices A. A decrease in the Long-Run Aggregate Supply B. An increase in Aggregate Demand C. A decrease in Aggregate Demand D. An increase in the Short-Run Aggregate Supply E. An increase in the Long-Run Aggregate Supply F. A decrease...
If potential output exceeds actual real output by a wide margin, this implies: Select one: a....
If potential output exceeds actual real output by a wide margin, this implies: Select one: a. an excess of imports over exports b. a high rate of unemployment c. that the majority of consumer demand has changed from goods to services d. a sharply rising price level e. that the majority of consumer demand has changed from services to goods
4. Real Versus Nominal GDP Aa Aa Consider a simple economy that produces two goods: cupcakes...
4. Real Versus Nominal GDP Aa Aa Consider a simple economy that produces two goods: cupcakes and muffins. The following table shows the prices and quantities for the goods over a three-year period. Prices and Quantities Price of Quantity of Price of cupcakes (6) cupcakes muffins (C) 150 2 2003 200 Quantity of muffins Year 2016 2017 2018 100 150 100 Use the information from the previous table to fill in the following table. Real GDP (Base year 2016) (C)...
Recall the method of calculating real GDP detailed in the chapter. As you may already have...
Recall the method of calculating real GDP detailed in the chapter. As you may already have noticed, this method has a problem: in calculating aggregate output, this method weights the output of the various goods and services by their relative prices in the base year. Say, for example, a textbook costs $100 in the base year, and a laptop costs $2,000. This means that the laptop would have 20 times the weight of a book in calculating aggregate output. But...
Potential real GDP is O A. the level of GDP attained when most firms are producing at capacity and unemployment is low. OB. the level of GDP attained when only some firms have excess capacity. O C. the level of GDP attained when all firms are producing at capacity. OD. the level of GDP attained when all firms have excess capacity Potential real GDP
What is potential GDP? O A) It is the level of real GDP in the long run. OB) It is the difference between current GDP and maximum GDP. O C ) It is the level of real GDP in the short run. O D) It is the level of GDP at which inflation is constant.
la 5 If in 2018 US real GDP is $19 trillion and US nominal GDP is $21 trillion. Which of the following is correct? 2018 is the base year. Price level in 2018 must be higher than base year level. O Quantity of final goods and services produced in 2018 must be higher than base year level. O Quantity of final goods and services produced in 2018 must be lower than base year level. 06
target rate of inflation is 2 percent, the real GDP. If the weights for the 2 percent, the aurrent inflation rate is 4 percent, and real GDP is 2 percent above potential i inflation gap and the output gap are both 1/2, then according to the Taylor rule the equals 20) ) 4 percent. B)6perennt. C)8percent. D) 10 percent. Figure 11-2 Real GDP per hour worked, YIL oductior function, Production Production function Capital per hour worked, K/L $40 60 21)...
4. Real Versus Nominal GDP Aa Aa Consider a simple economy that produces two goods: cupcakes and muffins. The following table shows the prices and quantities for the goods over a three-year period. Prices and Quantities Price of Quantity of Price of cupcakes (6) cupcakes muffins (C) 150 2 2003 200 Quantity of muffins Year 2016 2017 2018 100 150 100 Use the information from the previous table to fill in the following table. Real GDP (Base year 2016) (C)...
Recall the method of calculating real GDP detailed in the chapter. As you may already have noticed, this method has a problem: in calculating aggregate output, this method weights the output of the various goods and services by their relative prices in the base year. Say, for example, a textbook costs $100 in the base year, and a laptop costs $2,000. This means that the laptop would have 20 times the weight of a book in calculating aggregate output. But...
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