Homework Answers
Ans) the correct option is b) the real growth rate to decrease and the inflation rate to fall
Ans) the correct option is a) A widespread contraction in economic activity visible in many variables including real GDP, real income, and employment.
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on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what...
Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a...
Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a decrease in aggregate supply. The result will be a Select one: a. rise in real GDP but price level changes will be indeterminate. b. rise in real GDP and a fall in the price level. c. an indeterminate change in real GDP and a rise in the d. an indeterminate change in real GDP and a fall in the price level e. rise in...
Figure 4 nflation Rate Dynamic AS Dynamic AD Real GDP Growth In figure 4, in the...
Figure 4 nflation Rate Dynamic AS Dynamic AD Real GDP Growth In figure 4, in the long run we would expect aggregate supply to be: Figure 4 Final Eco 216.pdf 8 KB A. horizontal B. vertical C. positively sloped D. negatively sloped E. negatively sloped Reset Selection In figure 4, if dynamic AD decreases, then in the short run real GDP growth: Figure 4 Final Eco 216.pdf 8 KB A. and inflation increase B. and inflation decrease C. rises and...
Which of the following recessionary periods was not caused by an AD shock Great Depression 1973-75...
Which of the following recessionary periods was not caused by an AD shock Great Depression 1973-75 recession 1981-82 recession Great Recession During the Great Depression, the economy experienced inflation disinflation deflation hyper-inflation During the Great Depression, output growth increased at a slower than normal rate was negative for 4 quarters before turning positive was negative for 4 years before turning positive didn't decline as much as during the Great Recession While there is no "standard" for distinguishing an economic depression...
7. Those who advocate counter-cyclical fiscal policy would agree with all but one of the following...
7. Those who advocate counter-cyclical fiscal policy would agree with all but one of the following statements. Which is the exception? A) Governments should be non-interventionist. B) Automatic stabilizers are not particularly effective. C) The economy is not capable of automatic self-adjustment in response the problems of unemployment and inflation. D) Counter cyclical fiscal policy is a powerful and effective tool. E) Government budget deficits are a less serious problem than income gaps. 8. Assume that the economy is in...
Inflation rate, Solow growth curve ut of 2.0 AD (M+V = 12%) 12% Real GDP growth rate Refer to the AD/AS graph 5 abo...
Inflation rate, Solow growth curve ut of 2.0 AD (M+V = 12%) 12% Real GDP growth rate Refer to the AD/AS graph 5 above. It shows an AD curve consistent with a spending growth of 12%. Assume the Solow growth rate is 5%. What does the model predict for the inflation rate when the economy is growing at the Solow rate? Select one: O a.4% O b.7% O c.0% O d. 3%
An example of a positive real business cycle shock would be .. - a sudden Increase...
An example of a positive real business cycle shock would be .. - a sudden Increase in the money supply ma sudden decline in the working population (due to a fatal disease). the discovery of a new edible crop. ... the sudden decrease in the central bank's Inflation target. Erratic government government behavior can lead to a negative real shock by ... Increasing the perceived risk of Investing or saving - Increasing the inflation target. ... decreasing barriers to new...
A supply shock is A. an increase in the rate of inflation as a result of...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
2. When aggregate demand increases, what happens to prices and employment? a. Prices will fall and...
2. When aggregate demand increases, what happens to prices and employment? a. Prices will fall and unemployment will rise. b. Prices and unemployment fall. Prices and unemployment rise. d. Prices will rise and unemployment will fall. c. Figure 16-1 a Price Level Inflation Rate c d e 3 Output Unemployment 3. Refer to the Figure 16-1. If the economy starts at c and 1, then in the short run, where does an increase in government expenditures move the economy? a....
6.The Aggregate Demand (AD) curve is obtained by combining: (a) The consumption function, planned investment and...
6.The Aggregate Demand (AD) curve is obtained by combining: (a) The consumption function, planned investment and the central bank's policy reaction function. (b) The consumption function and the Taylor rule. (c) The equation for PAE, the central bank's policy reaction and Y = PAE. (d) Y=PAE and the consumption function. (e) The equation for planned investment and the central bank policy reaction function. 7.The AD curve is generally assumed to have a negative slope. However, which of the following would...
What would cause the BOTH the price level to decrease and real GDP to decrease? O...
What would cause the BOTH the price level to decrease and real GDP to decrease? O a shift to the left of the AD curve a shift to the right of the SRAS curve a shift to the left of the SRAS curve a shift to the right of the AD curve Question 6 (2 points) When there is an increase in aggregate demand along a stationary upward sloping short run in the short run. and aggregate supply curve, the...
Consider the AD/AS macro model. Suppose there is an increase in aggregate demand and, simultaneously, a decrease in aggregate supply. The result will be a Select one: a. rise in real GDP but price level changes will be indeterminate. b. rise in real GDP and a fall in the price level. c. an indeterminate change in real GDP and a rise in the d. an indeterminate change in real GDP and a fall in the price level e. rise in...
Figure 4 nflation Rate Dynamic AS Dynamic AD Real GDP Growth In figure 4, in the long run we would expect aggregate supply to be: Figure 4 Final Eco 216.pdf 8 KB A. horizontal B. vertical C. positively sloped D. negatively sloped E. negatively sloped Reset Selection In figure 4, if dynamic AD decreases, then in the short run real GDP growth: Figure 4 Final Eco 216.pdf 8 KB A. and inflation increase B. and inflation decrease C. rises and...
7. Those who advocate counter-cyclical fiscal policy would agree with all but one of the following statements. Which is the exception? A) Governments should be non-interventionist. B) Automatic stabilizers are not particularly effective. C) The economy is not capable of automatic self-adjustment in response the problems of unemployment and inflation. D) Counter cyclical fiscal policy is a powerful and effective tool. E) Government budget deficits are a less serious problem than income gaps. 8. Assume that the economy is in...
Inflation rate, Solow growth curve ut of 2.0 AD (M+V = 12%) 12% Real GDP growth rate Refer to the AD/AS graph 5 above. It shows an AD curve consistent with a spending growth of 12%. Assume the Solow growth rate is 5%. What does the model predict for the inflation rate when the economy is growing at the Solow rate? Select one: O a.4% O b.7% O c.0% O d. 3%
An example of a positive real business cycle shock would be .. - a sudden Increase in the money supply ma sudden decline in the working population (due to a fatal disease). the discovery of a new edible crop. ... the sudden decrease in the central bank's Inflation target. Erratic government government behavior can lead to a negative real shock by ... Increasing the perceived risk of Investing or saving - Increasing the inflation target. ... decreasing barriers to new...
A supply shock is A. an increase in the rate of inflation as a result of expansionary fiscal policy, resulting in a leftward shift of the SRAS curve. B. a sudden increase in the price of an important natural resource, resulting in a leftward shift of the SRAS curve. O C. an increase potential GDP caused by a govemment expenditure multiplier, resulting in a leftward shift of the AD curve. D. an increase in both the inflation and the unemployment...
2. When aggregate demand increases, what happens to prices and employment? a. Prices will fall and unemployment will rise. b. Prices and unemployment fall. Prices and unemployment rise. d. Prices will rise and unemployment will fall. c. Figure 16-1 a Price Level Inflation Rate c d e 3 Output Unemployment 3. Refer to the Figure 16-1. If the economy starts at c and 1, then in the short run, where does an increase in government expenditures move the economy? a....
What would cause the BOTH the price level to decrease and real GDP to decrease? O a shift to the left of the AD curve a shift to the right of the SRAS curve a shift to the left of the SRAS curve a shift to the right of the AD curve Question 6 (2 points) When there is an increase in aggregate demand along a stationary upward sloping short run in the short run. and aggregate supply curve, the...
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