Homework Answers
(a) By plotting AD and AS curve, we get the graph as shown below:
Current equilibrium level of real GDP at which AD=AS is $300 billion and the price level =130.
(b) Current value of nominal GDP= (Real GDP)(Price level)= ($300 billion)(130)=$39000 billion.
(c) Full employment level of real GDP is $320 billion. This is shown as LRAS in the above graph.
(d) Because current equilibrium real GDP is lower than the full employment real GDP, this implies that the economy is experiencing a recession. Amount of recession = $(320-300)billion= $20 billion.
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4. The following table contains hypothetical information about real GDP (billions of dollars) and the price...
Possible Levels of Employment, In Millions Real Domestic Output, Billions Consumption, Billions Savings, Billion 35 230...
Possible Levels of Employment, In Millions Real Domestic Output, Billions Consumption, Billions Savings, Billion 35 230 239 -9 40 250 255 -5 45 270 271 -1 50 290 287 3 55 310 303 7 60 330 319 11 65 350 335 15 70 370 351 19 75 390 367 23 Saving, Billions a. Using the above consumption and saving data and assuming investment is $15 billion, what are saving and planned investment at the $370 billion level of domestic output?...
The following table shows the real output demanded and supplied at various price levels in a...
The following table shows the real output demanded and supplied at various price levels in a hypothetical economy. Real Output Demanded Price Level Real Output Supplied (Billions of dollars) (Index number) (Billions of dollars) 40 160 340 80 120 320 120 80 280 200 40 200 320 20 80 On the following graph, use the blue points (circle symbol) to plot the aggregate demand (Initial AD) curve for the economy. Then use the orange points (square symbol) to plot the...
The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2009 dollars)
The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2009 dollars), and population (in thousands) of the United States in 1965,1975,1985,1995,2005, and 2015 . The U.S. price level rose consistently over the period 1965-2015.YearNominal GDP (billions of dollars)Real GDP (billions of 2009 dollars)Population (thousands)1965$743.7$3,976.7194,25019751,688.95,385.4215,89119854,346.77,593.8238,41619957,664.110,174.8266,458200513,093.714,234.2296,115201517,947.016,348.9321,601a. Why is real GDP greater than nominal GDP for all years until 2005 and lower for 2015 ?b. Calculate the percent change in real GDP from 1965 to...
QUESTION 10 0.36 points Save Answer LRAS Aggregate price level P, AD, Real GDP In response to the high unemployment rate and low level of real GDP at point El in the diagram above, the Federal Op...
QUESTION 10 0.36 points Save Answer LRAS Aggregate price level P, AD, Real GDP In response to the high unemployment rate and low level of real GDP at point El in the diagram above, the Federal Open Market Committee (the decision-making body of the Federal Reserve) decides to engineer a decrease in interest rates. If no other disturbances occurred, and the Fed calibrated its policy perfectly so that full employment equilibrium was restored, what price level would prevail at the...
8. accompanying table shows data on nominal GDP in billions of dollars), real GDP (in billions...
8. accompanying table shows data on nominal GDP in billions of dollars), real GDP (in billions of 2007 doll lars), and population (in thousands) of Canada in 1966, 1976, 1986, 1996, 2006, and 2016. The Canadian price level rose consistently over the period 1966-2016. Nominal GDP (billions of dollars) $64.8 200.0 524.5 857.0 Real GDP (billions of Population 2007 dollars) (thousands) Year 1966 1976 1986 1996 2006 2016 $431.9 19 998 23 414 26 067 29 570 32 529 658.0...
1. Suppose that the aggregate demand supply schedules for a hypothetical economy are shown as below:...
1. Suppose that the aggregate demand supply schedules for a hypothetical economy are shown as below: AD (in billion ) Price level index) SRAS (in billion $ $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use these sets of data to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also...
2018 Questions 6-12 Zesta's Economic Data 2016 2017 Actual GDP ($ Billions) 900 B = ?...
2018 Questions 6-12 Zesta's Economic Data 2016 2017 Actual GDP ($ Billions) 900 B = ? Actual GDP growth rate (%) 2.0% Real GDP ($ Billions) A = ? 2019 965 2.50% 915 E = ? D = ? Real GDP growth rate (%) GDP Price Deflator Rate of inflation (%) C = ? 103 101 105 F = ? Actual = Nominal = Current GDP in cell A (rounded to closest 10 dollars) is a) 854 b) 866 c)...
1. Starting at Full Employment, explain what happens to output, the price level, and employment )...
1. Starting at Full Employment, explain what happens to output,
the price level, and
employment ) in each of these cases and use the AD/AS diagram
(use arrows and new
lines) to show the direction of changes
b. Consumers become more pessimistic about the economy
2. Describe the main tools of monetary policy the Federal
Reserve uses and how they would use
them if there were a financial crisis to stabilize the
economy
3. a) the federal government was required...
Please help answer this graph Price level In the year 2000, the country of Economika was...
Please help answer this graph
Price level In the year 2000, the country of Economika was in long-run macroeconomic equilibrium, as shown in the graph below. The full-employment level of GDP in 2000 was $5 billion LRAS, SRAS In 2001, the following events occurred (1) Growth in factors of production and technology caused potential GDP to rise to $6 billion (2) Consumers became more pessimistic about the future, and thus aggregate demand growth was not large. (3) There was a...
L in in the following table shows what the situation will be in 2015 if the Price Level (CP) GDP ...
l in in the following table shows what the situation will be in 2015 if the Price Level (CP) GDP Real GDP Price Level 2014 $1.55 trillion $1.55 trilion 2015 $1.61 trillion $1.55 trillion 124 Draw an aggregate demand and aggregate supply graph to illustrate the effects of Parliament's policy Assume that policy does not affect LRAS 1.) Use the line drawing tool to draw the LRAS curves for 2014 and 2015. Respectively label these curves LRAS2014 and 'LRAS2015 2.)...
QUESTION 10 0.36 points Save Answer LRAS Aggregate price level P, AD, Real GDP In response to the high unemployment rate and low level of real GDP at point El in the diagram above, the Federal Open Market Committee (the decision-making body of the Federal Reserve) decides to engineer a decrease in interest rates. If no other disturbances occurred, and the Fed calibrated its policy perfectly so that full employment equilibrium was restored, what price level would prevail at the...
8. accompanying table shows data on nominal GDP in billions of dollars), real GDP (in billions of 2007 doll lars), and population (in thousands) of Canada in 1966, 1976, 1986, 1996, 2006, and 2016. The Canadian price level rose consistently over the period 1966-2016. Nominal GDP (billions of dollars) $64.8 200.0 524.5 857.0 Real GDP (billions of Population 2007 dollars) (thousands) Year 1966 1976 1986 1996 2006 2016 $431.9 19 998 23 414 26 067 29 570 32 529 658.0...
1. Suppose that the aggregate demand supply schedules for a hypothetical economy are shown as below: AD (in billion ) Price level index) SRAS (in billion $ $100 300 $450 200 250 400 300 200 300 400 150 200 500 100 100 a. Use these sets of data to graph the aggregate demand and aggregate supply curves. What is the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also...
2018 Questions 6-12 Zesta's Economic Data 2016 2017 Actual GDP ($ Billions) 900 B = ? Actual GDP growth rate (%) 2.0% Real GDP ($ Billions) A = ? 2019 965 2.50% 915 E = ? D = ? Real GDP growth rate (%) GDP Price Deflator Rate of inflation (%) C = ? 103 101 105 F = ? Actual = Nominal = Current GDP in cell A (rounded to closest 10 dollars) is a) 854 b) 866 c)...
1. Starting at Full Employment, explain what happens to output,
the price level, and
employment ) in each of these cases and use the AD/AS diagram
(use arrows and new
lines) to show the direction of changes
b. Consumers become more pessimistic about the economy
2. Describe the main tools of monetary policy the Federal
Reserve uses and how they would use
them if there were a financial crisis to stabilize the
economy
3. a) the federal government was required...
Please help answer this graph
Price level In the year 2000, the country of Economika was in long-run macroeconomic equilibrium, as shown in the graph below. The full-employment level of GDP in 2000 was $5 billion LRAS, SRAS In 2001, the following events occurred (1) Growth in factors of production and technology caused potential GDP to rise to $6 billion (2) Consumers became more pessimistic about the future, and thus aggregate demand growth was not large. (3) There was a...
l in in the following table shows what the situation will be in 2015 if the Price Level (CP) GDP Real GDP Price Level 2014 $1.55 trillion $1.55 trilion 2015 $1.61 trillion $1.55 trillion 124 Draw an aggregate demand and aggregate supply graph to illustrate the effects of Parliament's policy Assume that policy does not affect LRAS 1.) Use the line drawing tool to draw the LRAS curves for 2014 and 2015. Respectively label these curves LRAS2014 and 'LRAS2015 2.)...
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