Homework Answers
23. Option C is correct.
MPC =
MPC = (7.8 - 7)/(9 - 8) = 0.80
24. Option D is correct.
Macro economic equilibrium occurs where the SRAS, LRAS and AD curves intersect each other.
25. Option A is correct.
If the expenditure exceeds the incomes, the unsold pile of stock would start declining and the firms would start to produce more output.
26. Option A is correct.
When there is a recessionary gap, the prices and wages fall. Decrease in wages, the firm's demand for workers increases and the cyclical movement in the business starts churning up.
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Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om...
Exhibit 2 Aggregate expenditures function 000 Real consumption and investinent expenditures (trillions of dollars per year)...
Exhibit 2 Aggregate expenditures function 000 Real consumption and investinent expenditures (trillions of dollars per year) - 0 1 9 2 3 4 5 6 7 8 Real disposable income (trillions of dollars per year) As shown in Exhibit 2, this economy is in macro equilibrium at: $2 trillion. $4 trillion. $6 trillion. O $8 trillion.
$10,0001 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 $0 $0 $2,000 $4,000 $6,000 $8,000 $10,000...
$10,0001 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 $0 $0 $2,000 $4,000 $6,000 $8,000 $10,000 Real GDP (Y) 1. The premise of the Keynesian aggregate expenditure model is that the amount of goods and services produced, and therefore the level of employment, depends directly on the level of total expenditures Refer to the above graph and answer the following questions: a. For the GDP level of $5000, GDP (output from producers) is less than real domestic output desired by...
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE $800 $3.200 Real GDP (per year) . (Figure: Aggregate Expenditures Curve IlI) According to the figur...
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE $800 $3.200 Real GDP (per year) . (Figure: Aggregate Expenditures Curve IlI) According to the figure Aggregate Expenditures Curve III, suppose that the economy is at the equilibrium real GDP of $3,200. Suppose that the consumption function in this figure rises by $100. What will the new equilibrium real GDP be? Show your work.
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE...
Answer the following questions, which relate to the aggregate expenditures model: a. Given the following: Ca...
Answer the following questions, which relate to the aggregate expenditures model: a. Given the following: Ca = $120, Ig = $60, Xn = − $10, and G = $40, What is the economy’s equilibrium GDP? Instructions: Enter your answer as a whole number. Equilibrium GDP = $ . b. If real GDP in an economy is currently $240, will the economy’s real GDP rise, fall, or stay the same? (Click to select) Real GDP will fall Real GDP will rise Real GDP will...
a. decrease b. increase c. constant Check my answer for me..pls $10,000 $8,000 Aggregate expenditure $6,000...
a.
decrease
b. increase
c. constant
Check my answer for me..pls
$10,000 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 SO $0 $8,000 $10,000 $2,000 $4,000 $6,000 Real GDP (Y) 1. The premise of the Keynesian aggregate expenditure model is that the amount of goods and services produced, and therefore the level of employment, depends directly on the level of total expenditures. Refer to the above graph and answer the following questions: a. For the GDP level of $5000, GDP...
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as...
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as a whole number. a. Given the following: Ca = $130, Ig = $60, Xn = − $10, and G = $40, what is the economy’s equilibrium GDP? b. If real GDP in an economy is currently $250, will the economy’s real GDP rise, fall, or stay the same? c. Suppose that full-employment (and full-capacity) output in an economy is $250. If Ca = $180,...
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as...
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as a whole number. a. Given the following: Ca = $130, 1g = $60, Xn=- $10, and G= $40, what is the economy's equilibrium GDP? Equilibrium GDP = D . b. If real GDP in an economy is currently $250, will the economy's real GDP rise, fall, or stay the same? (Click to select) c. Suppose that full-employment and full-capacity) output in an economy is...
AS AD 50100 200 300 400 500 600 700 REAL OUTPUT (in bilions of dollans per...
AS AD 50100 200 300 400 500 600 700 REAL OUTPUT (in bilions of dollans per year) following graph depicts a macro equilibrium. Answer the questions based on the information in the graph. (a) What is the equilibrium rate of GDP? (b) If full-employment (c) How large is the real GDP gap? real GDP is S1200, what problem does this economy have? IEshe multiplier were equal to 4, how much additional investment would be needed to increase aggregate demand by...
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as...
Answer the following questions, which relate to the aggregate
expenditures model:
Instructions: Enter your answer as a whole
number.
a. Given the following: Ca = $120,
Ig = $60, Xn = − $10, and
G= $30, what is the economy’s equilibrium
GDP?
b. If real GDP in an economy is currently $230, will the
economy’s real GDP rise, fall, or stay the same?
(Click to select) Real GDP will
rise. Real GDP will fall. Real
GDP stay the same.
c. Suppose that full-employment...
Real GDP Planned Government Net Aggregate Consumption Investment Purchases Exports Expenditures $2,000 $1,600 $250 $250 $100...
Real GDP Planned Government Net Aggregate Consumption Investment Purchases Exports Expenditures $2,000 $1,600 $250 $250 $100 2,500 2,000 250 250 100 3,000 2,400 250 250 100 3,500 2,800 250 250 100 If potential GDP is $4,000 billion, how much should government spending increase so that the economy can move to the full employment level of GDP? (Hint: multiplier effect) $100 O $300 $200 $400 O C DOLL
Exhibit 2 Aggregate expenditures function 000 Real consumption and investinent expenditures (trillions of dollars per year) - 0 1 9 2 3 4 5 6 7 8 Real disposable income (trillions of dollars per year) As shown in Exhibit 2, this economy is in macro equilibrium at: $2 trillion. $4 trillion. $6 trillion. O $8 trillion.
$10,0001 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 $0 $0 $2,000 $4,000 $6,000 $8,000 $10,000 Real GDP (Y) 1. The premise of the Keynesian aggregate expenditure model is that the amount of goods and services produced, and therefore the level of employment, depends directly on the level of total expenditures Refer to the above graph and answer the following questions: a. For the GDP level of $5000, GDP (output from producers) is less than real domestic output desired by...
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE $800 $3.200 Real GDP (per year) . (Figure: Aggregate Expenditures Curve IlI) According to the figure Aggregate Expenditures Curve III, suppose that the economy is at the equilibrium real GDP of $3,200. Suppose that the consumption function in this figure rises by $100. What will the new equilibrium real GDP be? Show your work.
Figure: Aggregate Expenditures Curve III 3. Aggregate expenditures (per year) 45-degree line AE...
a.
decrease
b. increase
c. constant
Check my answer for me..pls
$10,000 $8,000 Aggregate expenditure $6,000 Aggregate Expenditure $4,000 $2,000 SO $0 $8,000 $10,000 $2,000 $4,000 $6,000 Real GDP (Y) 1. The premise of the Keynesian aggregate expenditure model is that the amount of goods and services produced, and therefore the level of employment, depends directly on the level of total expenditures. Refer to the above graph and answer the following questions: a. For the GDP level of $5000, GDP...
Answer the following questions, which relate to the aggregate expenditures model: Instructions: Enter your answer as a whole number. a. Given the following: Ca = $130, 1g = $60, Xn=- $10, and G= $40, what is the economy's equilibrium GDP? Equilibrium GDP = D . b. If real GDP in an economy is currently $250, will the economy's real GDP rise, fall, or stay the same? (Click to select) c. Suppose that full-employment and full-capacity) output in an economy is...
AS AD 50100 200 300 400 500 600 700 REAL OUTPUT (in bilions of dollans per year) following graph depicts a macro equilibrium. Answer the questions based on the information in the graph. (a) What is the equilibrium rate of GDP? (b) If full-employment (c) How large is the real GDP gap? real GDP is S1200, what problem does this economy have? IEshe multiplier were equal to 4, how much additional investment would be needed to increase aggregate demand by...
Answer the following questions, which relate to the aggregate
expenditures model:
Instructions: Enter your answer as a whole
number.
a. Given the following: Ca = $120,
Ig = $60, Xn = − $10, and
G= $30, what is the economy’s equilibrium
GDP?
b. If real GDP in an economy is currently $230, will the
economy’s real GDP rise, fall, or stay the same?
(Click to select) Real GDP will
rise. Real GDP will fall. Real
GDP stay the same.
c. Suppose that full-employment...
Real GDP Planned Government Net Aggregate Consumption Investment Purchases Exports Expenditures $2,000 $1,600 $250 $250 $100 2,500 2,000 250 250 100 3,000 2,400 250 250 100 3,500 2,800 250 250 100 If potential GDP is $4,000 billion, how much should government spending increase so that the economy can move to the full employment level of GDP? (Hint: multiplier effect) $100 O $300 $200 $400 O C DOLL
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