In the short-run, if GDP is $5 trillion and aggregate expenditure is $6 trillion,
In the short-run, if GDP is $5 trillion and aggregate expenditure is $6 trillion,
GDP will fall because there will be unplanned increases in inventory levels
GDP will rise because there will be unplanned increases in inventory levels
the government will have to increase taxes
GDP will remain the same because this is equilibrium
GDP will rise because there will be unplanned decreases in inventory levels
Homework Answers
The correct answer is: E. GDP will rise because there will be unplanned decreases in inventory levels.
If aggregate planned expenditure exceeds real GDP, it implies that firms’ inventories are smaller than planned. Then firms will increase their output and real GDP will rise.
Add Answer to:
In the short-run, if GDP is $5 trillion and aggregate expenditure is $6 trillion,
Long run aggregate supply is the relationship between the quantity of real GDP supplied and the...
Long run aggregate supply is the relationship between the quantity of real GDP supplied and the price level when the maintain full employment changes in step with the price level to O A. money wage rate OB. quantity of money OC. real wage rate OD. interest rate supplied and the when the money wage rate, the prices of other resources and Short run aggregate supply is the relationship between the quantity of potential GDP remain constant O A real GDP...
Derive the aggregate expenditure function, and calculate the equilibrium real GDP.. Determine the expenditure multiplier using aggregate expenditure function slop value... What is the expenditure multiplier? ... Everything else the same, by how much do
Question#1A The following are details of the expenditure of a very small economy. All the autonomous expenditures are given in $ thousand. C = 200 + 0.8Yd I = 10 G = 50 T = 0.05Y X = 40 M = 0.1Y Derive the aggregate expenditure function, and calculate the equilibrium real GDP Determine the expenditure multiplier using aggregate expenditure function slope value Question#1B Suppose the slope of the AE curve is 0.80. i) What is the expenditure multiplier? ii) Everything else the same, by how much does equilibrium aggregate expenditure...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregat...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in government spending or an increase in taxes. taxes or an increase in government spending. interest rates or a decrease in taxes. saving or an increase in government spending Question 18 As disposable income decreases, consumption and saving both increase. and saving both decrease. increases and saving decreases. decreases and saving increases. Question 19 1 pts...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Aggregate Market Assignment 1. Update the graph below to show an increase in short run aggregate...
Aggregate Market Assignment 1. Update the graph below to show an increase in short run aggregate supply and show what effect this increase in Increase short run aggregate supply will have on price levels and real GDP. Price Tevel SRAS I AD Real GDP 2. Assume that a recessionary gap currently exists. If long-run supply (aka, potential output) increases and there is no change to aggregate demand or short run aggregate supply what happens to real GDP and to the...
THE AGGREGATE EXPENDITURE MODEL (IN THE SHORT RUN) YOU MUST SHOW YOUR CALCULATIONS IN THE SPACE...
THE AGGREGATE EXPENDITURE MODEL (IN THE SHORT RUN) YOU MUST SHOW YOUR CALCULATIONS IN THE SPACE BELOW FOR THE NEXT PROBLEM USE THE FOLLOWING FORMULA: CHANGE IN GDP = [ - MPC / (1-MPC) ] * CHANGE IN T Initially, the economy is producing well below the level of potential output of $16 trillion in goods and services. Also, currently net taxes is $2.6 trillion. According to precise government’s estimates, the government believes that by reducing net taxes to $1.7...
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the...
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%. Now assume that the central bank increases the money supply by 6%. a. Illustrate the short-run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level, and the Unemployment Rate. Label all curves and axis for full credit.
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illust...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
Long run aggregate supply is the relationship between the quantity of real GDP supplied and the price level when the maintain full employment changes in step with the price level to O A. money wage rate OB. quantity of money OC. real wage rate OD. interest rate supplied and the when the money wage rate, the prices of other resources and Short run aggregate supply is the relationship between the quantity of potential GDP remain constant O A real GDP...
The table gives the aggregate demand schedule, the short run aggregate supply schedule, and the long run aggregate supply schedule for an economy What is the quantity of real GDP at the short-run macroeconomic equilibrium? Price level (GDP deflator) The quantity of real GDP at the short-run macroeconomic equilibrium is s billion 100 Real GDP Real GDP Real GDP supplied supplied demanded in short run in long run (billions of 2007 dollars) 200 500 350 500 500 500 400 650...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
Question 16 1 pts In the aggregate expenditures model of the economy, a downward shift in aggregate expenditures can be caused by a decrease in government spending or an increase in taxes. taxes or an increase in government spending. interest rates or a decrease in taxes. saving or an increase in government spending Question 18 As disposable income decreases, consumption and saving both increase. and saving both decrease. increases and saving decreases. decreases and saving increases. Question 19 1 pts...
The graph below depicts the aggregate demand, Irrun aggregate supply, and short-run aggregate supply curves for the United States at an initial long-run macroeconomic equilibrium Price level] (P) LRAS SRAS Real GDP Consider a situation in which two things happen simultaneously: there is a deterioration of institutions, and the federal government massively increases spending. Which of the graphs below illustrates the shifts in this model given this situation? Price level Price level (P) (P) URAS LRAS, LRAS SRAS SRAS SRAS...
Aggregate Market Assignment 1. Update the graph below to show an increase in short run aggregate supply and show what effect this increase in Increase short run aggregate supply will have on price levels and real GDP. Price Tevel SRAS I AD Real GDP 2. Assume that a recessionary gap currently exists. If long-run supply (aka, potential output) increases and there is no change to aggregate demand or short run aggregate supply what happens to real GDP and to the...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
Most questions answered within 3 hours.
-
Why do organizations decline? What steps can top
management take to halt, decline, and restore organizational...
asked 5 minutes ago -
Under the influence of its drive force, a snowmobile is moving
at a constant velocity along...
asked 19 minutes ago -
What mechanisms Drive speciation??
(I.e. what was Dawins theory on the orgin of species, and how...
asked 1 hour ago -
The manager at a car assembly plant believes that the mean
assembly time for a car...
asked 2 hours ago -
Which of the following is true of electron capture?
A) It decreases the nuclide's mass number...
asked 4 hours ago -
Assuming an efficiency of 43.10%, calculate the actual yield of
magnesium nitrate formed from 114.9 g...
asked 4 hours ago -
The highly pathogenic bacterium Clostridium
perfringens causes gangrene, a disease that results in the
destruction of...
asked 6 hours ago -
In the context of situation analysis, which of the following is
a category for analysis in...
asked 6 hours ago -
In a study of the gas phase decomposition of sulfuryl chloride
at 600 K SO2Cl2(g)SO2(g) +...
asked 6 hours ago -
75 g of 2-propanol (C3H8O) and 25 g of pentane are mixed in a
200 mL...
asked 6 hours ago -
The 2800-turn coil in a dc motor has an area per turn of 1.1 ×
10-2...
asked 6 hours ago -
Draw a combinational logic circuit diagram with a symbol inside
the box for two I/P of...
asked 6 hours ago