A trough is when output and employment are recovering and expanding toward the full employment level....
A trough is when output and employment are recovering and expanding toward the full employment level.
True or False
Homework Answers
Ans - False
When output and employment recoverying and expanding towards a full employment is refer as an recovery phase in term of business cycle. Though refers to the negative saturation point in other words the global minimum in the negative domain (depression) of growth rate of the economy. In the phase of though the output, investment and employment falls to the lowest point well well below the steady growth path. There is an extensive depletion of national income and expenditure in the economy.
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A trough is when output and employment are recovering and
expanding toward the full employment level....
The full employment output level is the maximum amount of output that the economy can produce...
The full employment output level is the maximum amount of output that the economy can produce when all its resources are fully employed, or its potential output level. The intersection of AD = AS and the vertical line are the same. This intersection of all three curves is the potential real GDP and the natural rate of unemployment. True False An inflationary gap exists when the macro economy is in equilibrium at more than the potential output of the economy...
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...
4)If the economy is at full employment, a rise in net exports causes: A) An increase...
4)If the economy is at full employment, a rise in net exports causes: A) An increase in RGDP, no change in price in the AD/AS graph. B) Increase in prices in the AD/AS model with no change in the Keynesian model C) Increase in price, no change in RGDP in the Keynesian model D)Increase in RGDP and price level in both models. E) Increases RGDP and prices in Keynesian 5) What describes the difference between Keynesian and classical thinking? A)...
1 pts The potential output of an economy is the level of output produced when the...
1 pts The potential output of an economy is the level of output produced when the economy is operating: at its physical limit at the natural rate of unemployment above full employment above the natural rate of unemployment
Consider an economy operating below its full-employment output level. The government wants to enact a reduction in income taxes in an effort to restore the economy to full-employment output.
6. Keynesian demand-side versus supply-side effects Consider an economy operating below its full-employment output level. The government wants to enact a reduction in income taxes in an effort to restore the economy to full-employment output. On the graph that follows, shift one of the curves to illustrate the impact of the income tax cut on aggregate supply (AS) and aggregate demand (AD) that is emphasized by Keynesian economists. Note: Select and drag one or both of the curves to the desired position. Curves...
4. Suppose that an economy is given by the following equations C= 100+ 0.8 (Y-T), 1= 20, G=T=10. The full employment level of output of the economy is Yp=600 1) By how much will the govemment have to change its expenditure to achieve full employment equil
4. Suppose that an economy is given
by the following equations C= 100+ 0.8 (Y-T), 1= 20, G=T=10. The full
employment level of output of the economy is Yp=600 1) By how much will
the govemment have to change its expenditure to achieve full employment
equilibrium? 11) If the government wants to achieve the same target by
changing the level of lump sum tax, then by how much will it have to
change T? iii) By how much will the...
Suppose we are producing at the full-employment level and the current fiscal program is associated with...
Suppose we are producing at the full-employment level and the current fiscal program is associated with a balanced budget. What will be true if the Fed suddenly decides to implement expansionary monetary policy? The new appropiate fiscal policy will create a budget deficit The new appropiate fiscal policy will create a budget surplus If federal government doesn't change the fiscal program, the economy will end up with lower output and higher price All of the above
when an economy is already at full employment, what is the outcome of expansionary fiscal policies...
when an economy is already at full employment, what is the outcome of expansionary fiscal policies to employment, inflation, real output, and deficits
Assume that the natural unemployment rate and full-employment output are constant.
Assume that the natural unemployment rate and full-employment
output are constant.
Explain why the equilibrium level of output (GDP) in the Keynesian system can be determined at...
Explain why the equilibrium level of output (GDP) in the Keynesian system can be determined at the level of output that is below the full-employment level output whereas the equilibrium level of output in the classical system is determined at the full-employment level of output?
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...
1 pts The potential output of an economy is the level of output produced when the economy is operating: at its physical limit at the natural rate of unemployment above full employment above the natural rate of unemployment
Assume that the natural unemployment rate and full-employment
output are constant.
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