20) A) 4 percent
21) C) C to A
22) D) if either the price level rises or the or the quantity of final goods and services produced rises.
23) A) decrease in GDP
target rate of inflation is 2 percent, the real GDP. If the weights for the 2...
DE Figure 11-1 Real GDP per hour worked, YIL Production function, Production function, Production function IC 18 1 $40 60 Capital per hour worked, KIL Refer to Figure 11-1. Diminishing marginal returns is illustrated in the per-worker production function in the ngure above by a movement from Production function to Production function 2 from Production function 2 to Production function 1 from Production function to Production function 3 up alone any of the production functions
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...
Question 21 (1 point) Recently, the Chinese government has acknowledged that its GDP growth rate for 2015 will fall to 7%, which is substantially below China's recent annual growth rates, including that for 2014 (Wall Street Journal, March 5, 2015). Over the past several decades, China has invested heavily in capital, increasing its capital stock. However, its economic system provides entrepreneurs little incentive to work to develop new technologies. What is the effect of the Chinese government doubling its spending...
5. Real versus nominal GDP Consider a simple economy that produces two goods: pencils and oranges. The following table shows the prices and quantities of the goods over a three-year period. Year Pencils Oranges Price Quantity Price Quantity (Dollars per pencil) (Number of pencils) (Dollars per orange) (Number of oranges) Year Pencils Oranges Price Quantity Price Quantity (Dollars per pencil) (Number of pencils) (Dollars per orange) (Number of oranges) 2016 2 125 3 155 2017 4 135 3 210 2018...
During the Great Depression, real GDP decreased, unemployment rose, and the inflation rate was negative. Which would have been the appropriate federal government policy combination to improve economic performance? a.) increase government spending, decrease taxes, decrease the quantity of money b.) increase government spending, decrease taxes, increase the quantity of money c.) decrease government spending, increase taxes, decrease the quantity of money d.) keep government spending and taxes stable, increase the quantity of money
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
Based on the table below, calculate nominal GDP, real GDP, the GDP deflator, and the inflation rate in each year and fill in the missing parts of the table. Use 2014 as the base year. Instructions: Round nominal and real GDP values to two decimal places. Round GDP deflator and inflation rate values to the nearest whole number. Price of Quantity of Price of orange ($) Quantity of oranges 700 beach balls beach ball Nominal GDP ($) Real GDP ($)...
1) A good measure of the standard of living is A) real GDP per capita B) the real interest rate C) total nominal GDP D) total real GDP. E) nominal GDP per capita 2) If you invest $10,000 in a bond that earns 8% interest per year, how many years will it take to double your money? A) 1 year and 3 months B) 2 years and 6 months C) 5 years and 6 months D) 8 years E) 8...
Refer to the table below Suppose that aggregate demand increases such that the amount of real output demanded rises by $7 billion at each price levela. By what percentage will the price level increase?Will this inflation be demand-pull inflation or will it be cost-push inflation?b. If potential real GDP (that is, full-employment GDP) is $510 billion, what will be the size of the positive GDP gap after the change in aggregate demand?c. If government wants to use fiscal policy to counter...
Inflation rate is 7,8, target inflation rate is 2,1, GDP growth is 5,2, potential GDP growth is 2,7, equilibrium real fed funds rate is 1,8. Given this, what should the target level of the Federal funds rate?