What happens to U.S. real GDP and the price level in the short run, when a...
What happens to U.S. real GDP and the price level in the short run, when a major trading partner enters a recession (i.e. experience decrease in their income)? Assume that initially the U.S. economy is at its long-run equilibrium.
Homework Answers
If a trading partner enters recession,then the exports of US falls.A fall in exports reduces aggregate demand, causing both price level and real GDP to fall.
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What happens to U.S. real GDP and the price level in the short
run, when a...
What happens to real GDP and the price level, if a country enters a war and...
What happens to real GDP and the price level, if a country enters a war and experiences destruction of its human and physical capital stocks? Assume that initially the economy is at its long-run equilibrium.
Assume that the economy starts at potential output, and then there is a major decline in new home construction. a) Describe the short-run impact of this change on real GDP and the price level. Be spec...
Assume that the economy starts at potential output, and then there is a major decline in new home construction. a) Describe the short-run impact of this change on real GDP and the price level. Be specific about what component(s) of GDP change, and explain the economics behind the changes you describe. b) Assuming no further shocks/changes in policy, describe how the economy will transition from the short-run equilibrium in part a) to its long-run equilibrium. Be sure to explain the...
Suppose the current level of real GDP for an economy is below its potential level of...
Suppose the current level of real GDP for an economy is below its potential level of RGDP. Starting with this situation, and in the absence of any government action, what should next happen in the AD-AS model? Group of answer choices A. A decrease in the Long-Run Aggregate Supply B. An increase in Aggregate Demand C. A decrease in Aggregate Demand D. An increase in the Short-Run Aggregate Supply E. An increase in the Long-Run Aggregate Supply F. A decrease...
Find and explain questions 1-3 Using an AD/AS model, describe what happens to the price level...
Find and explain questions 1-3
Using an AD/AS model, describe what happens to the price level and output in Canada in the short run as a major hurricane destroys important Canadian production plants. Assume that the economy starts in a long-and short-run macroeconomic equilibrium. a) Price and output increase. b) Price and output decrease. c) Price increases and output decreases. d) Price decreases and output increases. Using an AD/AS model, describe what happens to the price level and output in...
Assume the U.S. economy is in both short-run and long-run equilibrium, as shown in the graph...
Assume the U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Suppose the federal government increases the amount of spending on the military. either the new a. Show the effect on the short-run equilibrium as a result of increased government spending. Using the graph, dra AD curve or new AS curve resulting from this change in spending. Instructions: Use the tool provided 'New Curve' to plot the appropriate line. After placing the curve, click...
This is a hypothetical scenario. Let’s assume that the economy of a US major trading partner...
This is a hypothetical scenario. Let’s assume that the economy
of a US major trading partner (e.g. Canada or China) suffers an
economic recession. Show and explain, other things constant,the
short run and long run effect of that country’s recession on the US
economy.
U.S. Economy (U.S. Market of All Goods and Services) Price Index LRAS SRAS1 P1 AD1 YF Real GDP
U.S. Economy (U.S. Market of All Goods and Services) Price Index LRAS SRAS1 P1 AD1 YF Real GDP
The U.S. experienced a major recession in 2008 & 2009? What is likely to happen to...
The U.S. experienced a major recession in 2008 & 2009? What is likely to happen to the price level and real GDP in Canada (our biggest trade partner) as a result? Select one: a. The price level and real GDP will both increase b. The price level and real GDP will both decrease C. The price level will increase, but real GDP will decrease d. The price level will decrease, but real GDP will increase e. The U.S. economy does...
For each of the cases below, indicate whether the price level and level of real GDP...
For each of the cases below, indicate whether the price level and level of real GDP will go "up","down", or stay the same." Assume that prices are flexible in both directions unless the information given indicates otherwise. The term in parentheses indicates whether the economy is operating in the immediate short run, short run, or long run. Answers may be used more than once. Expansionary fiscal policy. (long run) A. Price level down; real GDP same Development of alternative energy...
This is a hypothetical scenario. Let’s assume that the economy of a US major trading partner...
This is a hypothetical scenario. Let’s assume that the economy
of a US major trading partner (e.g. Canada or China) suffers an
economic recession. Show and explain, other things constant,the
short run and long run effect of that country’s recession on the US
economy.
U.S. Economy (U.S. Market of All Goods and Services) Price Index LRAS SRAS1 P1 AD1 YF Real GDP
Real GDP demanded Real GDP supplied Short run Long run (dollars) (dollars) Price level (dollars) 700...
Real GDP demanded Real GDP supplied Short run Long run (dollars) (dollars) Price level (dollars) 700 90 300 600 100 600 400 600 110 500 500 600 120 400 600 600 The table above gives the aggregate demand and aggregate supply schedules in Lotus Land. In short -run equilibrium, there is __---- 1) an inflationary gap of $100 2) a recessionary gap of $100 3) a recessionary gap of $200 4) an inflationary gap of $200
Find and explain questions 1-3
Using an AD/AS model, describe what happens to the price level and output in Canada in the short run as a major hurricane destroys important Canadian production plants. Assume that the economy starts in a long-and short-run macroeconomic equilibrium. a) Price and output increase. b) Price and output decrease. c) Price increases and output decreases. d) Price decreases and output increases. Using an AD/AS model, describe what happens to the price level and output in...
Assume the U.S. economy is in both short-run and long-run equilibrium, as shown in the graph below. Suppose the federal government increases the amount of spending on the military. either the new a. Show the effect on the short-run equilibrium as a result of increased government spending. Using the graph, dra AD curve or new AS curve resulting from this change in spending. Instructions: Use the tool provided 'New Curve' to plot the appropriate line. After placing the curve, click...
This is a hypothetical scenario. Let’s assume that the economy
of a US major trading partner (e.g. Canada or China) suffers an
economic recession. Show and explain, other things constant,the
short run and long run effect of that country’s recession on the US
economy.
U.S. Economy (U.S. Market of All Goods and Services) Price Index LRAS SRAS1 P1 AD1 YF Real GDP
U.S. Economy (U.S. Market of All Goods and Services) Price Index LRAS SRAS1 P1 AD1 YF Real GDP
The U.S. experienced a major recession in 2008 & 2009? What is likely to happen to the price level and real GDP in Canada (our biggest trade partner) as a result? Select one: a. The price level and real GDP will both increase b. The price level and real GDP will both decrease C. The price level will increase, but real GDP will decrease d. The price level will decrease, but real GDP will increase e. The U.S. economy does...
For each of the cases below, indicate whether the price level and level of real GDP will go "up","down", or stay the same." Assume that prices are flexible in both directions unless the information given indicates otherwise. The term in parentheses indicates whether the economy is operating in the immediate short run, short run, or long run. Answers may be used more than once. Expansionary fiscal policy. (long run) A. Price level down; real GDP same Development of alternative energy...
This is a hypothetical scenario. Let’s assume that the economy
of a US major trading partner (e.g. Canada or China) suffers an
economic recession. Show and explain, other things constant,the
short run and long run effect of that country’s recession on the US
economy.
U.S. Economy (U.S. Market of All Goods and Services) Price Index LRAS SRAS1 P1 AD1 YF Real GDP
Real GDP demanded Real GDP supplied Short run Long run (dollars) (dollars) Price level (dollars) 700 90 300 600 100 600 400 600 110 500 500 600 120 400 600 600 The table above gives the aggregate demand and aggregate supply schedules in Lotus Land. In short -run equilibrium, there is __---- 1) an inflationary gap of $100 2) a recessionary gap of $100 3) a recessionary gap of $200 4) an inflationary gap of $200
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