Homework Answers
Line abd is the path of potential GDP.
Point a => Potential GDP in year 1
Point b => Potential GDP in year 2
Point d => Potential GDP in year 3.
In year 2, expenditure line intersects the 45-degree line at the level of spending corresponding to point b. Point b shows the potential GDP. It means the economy has spent real GDP equal to potential GDP in year 2.
In year 3, expenditure line intersects the 45-degree line at the level of spending corresponding to point c. At point c in year 3, the spending is more than the potential GDP. It means, the economy spent more on real GDP than it would have if real GDP equaled potential GDP in year 3.
Answer: Option (A)
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Exhibit 23-6 Spending Year 1 Year 2 Year 3 Reference: Ref 11-4 According to Exhibit 23-6,...
Exhibit 23-5 Spending 45-degree line E Expenditure line Income or Real GDP Reference: Ref 11-3 If...
Exhibit 23-5 Spending 45-degree line E Expenditure line Income or Real GDP Reference: Ref 11-3 If spending was equal to the amount corresponding to point B in Exhibit 23-5, aggregate output would increase. aggregate output would decrease. spending is too high, and the expenditure line will shift down. the economy would be in equilibrium the marginal propensity to consume would increase.
1. The increase in government spending shifts which curve in which direction? (1 point) 2. Because...
1. The increase in government spending shifts which curve in which direction? (1 point) 2. Because the way the curve in question 1 shifted, the economy moves to a short run macro equilibrium with a) a higher or lower price level? b) a higher or lower real GDP? and c) a higher or lower unemployment rate? Be sure that you answer all 3 parts. (1 point) 3. From where the economy is in question 2, what will be the sequence...
Scenario: Open Economy S- nment spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1...
Scenario: Open Economy S- nment spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion. an open economy GDP is $12 trillion this year. Consumption is $8 trillion, and 36 (Scenario: Open Economy S-l)Look at the scenario Open Economy S- IHow much is private saving? 31 (Scenario: Open Economy S-D) Look at the scenario Open Economy S I What is the government budget balance? 40 (Scenario: Open Economy S- DLook at the scenario...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
1. 2. 3. 4. 5. According to the neoclassical model, a contractionary monetary policy will Select...
1.
2.
3.
4.
5.
According to the neoclassical model, a contractionary monetary policy will Select the correct answer below: O only lower the price level O only raise the price level O lower the price level and real GDP in the long run lower the price level bur raise GDP In the short run, which of the following prevent the economy from operating at potential output? Select the two correct answers below. Select all that apply: limits in technology...
Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An...
Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An increase in real GDP of the UNE output of goods and services U 3. Economists use the termino debe overall production levels rising 4. Suppose that a borrower and and then on a loan. Then nation turns out to be the one that the real interest rate on this loans lower than 6. The catch-up effect is deed the property where rich more rapidly...
THERE ARE 20 total QUESTIONS PLEASE ANSWER ALL OF THEM QUESTION 1 One way to reduce the recessio...
THERE ARE 20 total QUESTIONS PLEASE ANSWER ALL OF THEM
QUESTION 1 One way to reduce the recessionary gap through fiscal policy is to O increase government purchases. increase taxes. O decrease transfer payments. decrease the MPC QUESTION 2 Which of the following is true of open-market operations? It involves the purchase and sale of government securities by the central bank. O it involves the purchase and sale of stocks and bonds by private banks. It involves measures taken by...
Question 23 (1 point) Figure 4-18 20 price 1 2 3 4 5 6 7 8...
Question 23 (1 point) Figure 4-18 20 price 1 2 3 4 5 6 7 8 9 10 quantity Refer to Figure 4-18. What is the equilibrium quantity in this market? a) 7.5 units Ob) 5 units OC) 10 units O d) The equilibrium quantity cannot be determined from this graph. Question 24 (1 point) Figure 4-18 2 prace 1 2 3 4 5 6 7 8 9 10 quantity Refer to Figure 4-18. What is the equilibrium price in...
Consult exhibit 2 then, answers the following questions: 1/ Using the IS-LM model, how does the...
Consult exhibit 2 then, answers the following questions: 1/ Using the IS-LM model, how does the spending hypothesis explain the great depression 2 2/ When relying on the IS-LM model, economists often reach the conclusion that the "Money hypothesis" is not so relevant to explain the great depression. Explain why. Exhibit 2: TABLE 11-2 What Happened During the Great Depression? Consumption Unemployment Rate (1) Real GNP 23 1930 2036 1835 1695 144.2 141.5 1396 130.4 126.1 1931 1932 1933 1934...
2. Download the annual real GDP and GDP data of the United States 1950-2018 from FRED....
2. Download the annual real GDP and GDP data of the United States 1950-2018 from FRED. For the real GDP, the data online is chain-weighted and uses 2012 as the base year. In the lecture hursday, I showed you the detailed method and calculated the new chain-weighted real GDP when 1990 is the base year. You are required to calculate a new sequence of chain- weighted real GDP given a new base-year. The base year you should use in your...
Exhibit 23-5 Spending 45-degree line E Expenditure line Income or Real GDP Reference: Ref 11-3 If spending was equal to the amount corresponding to point B in Exhibit 23-5, aggregate output would increase. aggregate output would decrease. spending is too high, and the expenditure line will shift down. the economy would be in equilibrium the marginal propensity to consume would increase.
1. The increase in government spending shifts which curve in which direction? (1 point) 2. Because the way the curve in question 1 shifted, the economy moves to a short run macro equilibrium with a) a higher or lower price level? b) a higher or lower real GDP? and c) a higher or lower unemployment rate? Be sure that you answer all 3 parts. (1 point) 3. From where the economy is in question 2, what will be the sequence...
Scenario: Open Economy S- nment spending is $2 trillion. Taxes are $0.5 trillion. Exports are $1 trillion, and imports are $3 trillion. an open economy GDP is $12 trillion this year. Consumption is $8 trillion, and 36 (Scenario: Open Economy S-l)Look at the scenario Open Economy S- IHow much is private saving? 31 (Scenario: Open Economy S-D) Look at the scenario Open Economy S I What is the government budget balance? 40 (Scenario: Open Economy S- DLook at the scenario...
Exhibit 8-8 Aggregate expenditures function Real consumption and Investment expenditures (trillions of dollars per year) om 0 1 2 3 4 5 6 7 8 9 10 Real disposable income (trillions of dollars per year) 23. In Exhibit 8-8, what is the households' marginal propensity to consume (MPC)? 20.5. c. 0.8. b. 0.75 d. 1. 24. Using the Keynesian aggregate expenditures model, which of the following is true? a Macro equilibrium may occur at levels of real GDP other than...
1.
2.
3.
4.
5.
According to the neoclassical model, a contractionary monetary policy will Select the correct answer below: O only lower the price level O only raise the price level O lower the price level and real GDP in the long run lower the price level bur raise GDP In the short run, which of the following prevent the economy from operating at potential output? Select the two correct answers below. Select all that apply: limits in technology...
Ante tolikowing Us Towy w Et Questo 39 Gradesh 1. The western component DD 2. An increase in real GDP of the UNE output of goods and services U 3. Economists use the termino debe overall production levels rising 4. Suppose that a borrower and and then on a loan. Then nation turns out to be the one that the real interest rate on this loans lower than 6. The catch-up effect is deed the property where rich more rapidly...
THERE ARE 20 total QUESTIONS PLEASE ANSWER ALL OF THEM
QUESTION 1 One way to reduce the recessionary gap through fiscal policy is to O increase government purchases. increase taxes. O decrease transfer payments. decrease the MPC QUESTION 2 Which of the following is true of open-market operations? It involves the purchase and sale of government securities by the central bank. O it involves the purchase and sale of stocks and bonds by private banks. It involves measures taken by...
Question 23 (1 point) Figure 4-18 20 price 1 2 3 4 5 6 7 8 9 10 quantity Refer to Figure 4-18. What is the equilibrium quantity in this market? a) 7.5 units Ob) 5 units OC) 10 units O d) The equilibrium quantity cannot be determined from this graph. Question 24 (1 point) Figure 4-18 2 prace 1 2 3 4 5 6 7 8 9 10 quantity Refer to Figure 4-18. What is the equilibrium price in...
Consult exhibit 2 then, answers the following questions: 1/ Using the IS-LM model, how does the spending hypothesis explain the great depression 2 2/ When relying on the IS-LM model, economists often reach the conclusion that the "Money hypothesis" is not so relevant to explain the great depression. Explain why. Exhibit 2: TABLE 11-2 What Happened During the Great Depression? Consumption Unemployment Rate (1) Real GNP 23 1930 2036 1835 1695 144.2 141.5 1396 130.4 126.1 1931 1932 1933 1934...
2. Download the annual real GDP and GDP data of the United States 1950-2018 from FRED. For the real GDP, the data online is chain-weighted and uses 2012 as the base year. In the lecture hursday, I showed you the detailed method and calculated the new chain-weighted real GDP when 1990 is the base year. You are required to calculate a new sequence of chain- weighted real GDP given a new base-year. The base year you should use in your...
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