If total spending is less than total output, then price levels will Select one: a. rise and output will increase. b. fall and output will decrease. c. fall and output will increase. d. rise and output will decrease.

If total spending is less than total output, then price levels will Select one: a. rise and output will increase. b. fall and output will decrease. c. fall and output will increase. d. rise and output will decrease.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter15: Measuring A Nation's Income

Section: Chapter Questions

Problem 6CQQ

See similar textbooks

Related questions

Q: If nominal GDP increases from one year to the next, O prices real GDP or prices or both real GDP…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: a. Explain briefly what the consumer price index tries to measure?

A: Since you have posted multiple questions, we will solve the first one for you. If you want any…

Q: Explain which graph shows best how an economy responds In the 'short run' to an increase in consumer…

A: The aggregate demand curve shows all the combinations of real GDP level and price level at which the…

Q: Consider how each of the following events is likely to affect real GDP. Do you think the change in…

A: The countries around the world work upon the basis of the production of the goods, services, assets,…

Q: he Figure above shows statistics on Real GDP in Qatar ($billions) from 2012 to 2020, in addition to…

A: real domestic product, GDP is the standard proportion of the worth added made through the production…

Q: Three points each part. Answer the following: a. Real GDP in 2021 using 2020 prices was (write out…

A: Answer: Real GDP: Real GDP refers to the value of goods and services produced in a year at the base…

Q: b) Why is GDP critically linked with inflation and unemployment rate?

A: Gross domestic product or GDP is defined as the value of all final goods and services produced in a…

Q: f nominal GDP increased by 6 percent during a year, while the GDP deflator increased by 4 percent,…

A: Real GDP depicts the true growth of the economy and is essential to calculate

Q: a. What is real GDP in 2008, at prices of 2007? billion es b. What is real GDP in 2007, at prices of…

A: Real GDP can be calculated by the given formula : Real GDP =( Nominal GDP *100) / price index

Q: Suppose a closed economy has national income of $11 million, Investment of $2 million, CPI of 150…

A: A closed economy is not open to trade. National income measures the value of all the goods and…

Q: Phase in which production, employment and income decline, while inventories increase. 1-depression…

A: There are four phases of business cycle, recession, expansion, peak and trough

Q: Phase in which employment rises, and production and income increase. 1-depression 2- expansion 3-…

A: There are some phases of business cycle to define an economic conditions. Such phases include…

Q: Q1. If the nominal GDP rises by 6 percent and the price level rises by 3 percent, then the real GDP…

A: "Since you have asked multiple questions, we will solve first question for you .. If you want any…

Q: Explain why economists focus on the GDP, inflation, and unemployment when assessing the health of…

A: The growth in the GDP discloses to us how quickly does the economy develops, that is the manner by…

Q: 3. Categories of expenditures Tim and Alyssa Espinosa live in Swarthmore, PA. Their son, Brian, owns…

A: The components of GDP are consumption spending, investment spending, government purchases and net…

Q: produces hotdogs and buns in the following quantities and prices in 2016 and 2017. Assume also that…

A: GDP measures the market value of goods and services produced in an economy within a given period of…

Q: A vertical curve means that any increase in GDP will result in which of the following for the…

A: When talking about real GDP and price level, a vertical curve explains the long-run aggregate supply…

Q: ch the economy with its definition

A: Mixed Economy - It is the economy in which the decisions related to the economy (mainly consumption…

Q: 2. If the economy grew at a 3% rate this year and average prices grew ______, people would be better…

A: GDP is the market value of all the final goods and services produced within the national boundary.…

Q: Given the economy current production was, GDP=150M, an economist would be concerned with: Select…

A: A real estate bubble, also referred to as a “housing bubble,” occurs when the price of housing rises…

Q: Price Real Level GDP 128 $ 18 $ 2 $ 3 $ 1 $ 5 125 20 4. 122 22 3. 119 24 4 116 26 10 1 In the…

A: GDP is a macroeconomic measure that is used to determine the total aggregate production in a…

Q: Which COMPONENTS (IF ANY) of U.S. GDP (consumption C, investment I, government spending G, and/or…

A: We know , Y = C + I + G + NX…

Q: A. Using the average price for all three goods, real GDP in 2012 is $___. (Enter your response as an…

A: Q 2012 P 2012 Q 2013 P 2013 Cars 12 $3000 14 $4000 Computers 4 $1100 7 $400 Oranges…

Q: The paradox of thrift is based on a circular flow of the economy in which current spending drives…

A: a. The term paradox of thrift states that if every person in an any economy increase their…

Q: 3. What happens in the economy if total production (TP) is greater than total expenditures (TE)?

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: ne annual output and prices of a three-good economy are shown in the table BelOW. Quantity of Goods…

A: Answer to the question is as follows :

Q: An increase in the nominal GDP by 5% can correspond to a A decrease of real GDP by 5% and an…

A: The gross domestic product of an economy is defined as the market value of all the final…

Q: if consumption is $3.8 trillion, investment is $1.1 trillion, government spending is $1.1 trillion,…

A: here we calculate the GDP which are as follow-

Q: Year Quantity of Milk (Quarts) 100 200 200 Price of Milk Price of 2007 2008 2009 $1 $1 $2 Honey $2…

A: Nominal GDP is the monetary value of all the final goods and services produced within the boundary…

Q: QUESTION 14 Imagine an economy that produces only one good, say widgets. In year 1, it produced 10…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Potential GDP Aggregate expenditure AE, E, 45° Y. Real GDP (Y) On the 45 degrees line: GDP is equal…

A: We have 45° line for GDP and aggregate expenditure.

Q: The table below presents a brief summary of City A’s total spending, local GDP, and population…

A: Gross Domestic Product (GDP) measures the value of final goods and services produced within the…

Q: If nominal GDP grows by 7% but inflation rises 3%, what is the real GDP?

A: Given that, nominal GDP grows by 7% but inflation rises 3%, what is the real GDP.

Q: Explain how China’s real GDP can grow at a 6.9 percent rate when consumption and investment grew…

A: GDP denotes the total aggregate output that is produced in the country at a given time period. It is…

Q: . The participation of women in the U.S. labor forcehas risen dramatically since 1970.a. How do you…

A: GDP is a macroeconomic measure used in the computation of the aggregate total output produced in an…

Q: f all quantities produced rise by 5 percent and all prices fall by 5 percent, why is nominal GDP…

A: Nominal GDP is the total value of goods and services that are produced in the economy within the…

Q: Increases in real GDP are often interpreted as increases in welfare. What are some problems…

A: An increment in ostensible GDP may simply mean costs have expanded, while an expansion in genuine…

Q: 3. Categories of expenditures Larry and Megan Smith live in Swarthmore, PA. Megan's father, Raphael,…

A: Aggregate demand is the sum of consumption, investment, government spending and net exports in an…

Q: If there is a recession, which of the following will decline? O GDP Government purchases Real GDP…

A: A recession is a contraction in the economic cycle for two or more quarters.

Q: Suppose that over the last three years, there has been a 10% increase in real GDP, but a 5% increase…

A: Gross domestic product (GDP) measures the value of final goods and services produced within the…

Q: What impact would each of following have in on real gdp ?would economic well being increase or…

A: Answer: (A). If the average, people in a country decide to increase the number of hours they work by…

Q: Changes in real GDP reflect

A: GDP refers to the sum total of all final goods and services produced in a particular territory,…

Q: Let GDP (Gross Domestic Product) as a simplification, only be one good, apples. Find the 100 and…

A: GDP refers to the value of goods and services produce in a country during a year within the domestic…

Q: The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total production and…

A: Given values: Price of shoes in 2019 = 110Quantity of shoes in 2019 = 3500Price of computer in 2019…

Q: The country of Sylvania produces and consumes only three goods: Red Bull, pizza, and T-shirts. The…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: a. Calculate the GDP using expenditure approach: b. Calculate the GDP using income approach: C.…

A: Gross domestic product (GDP) is the standard measure of the value added created through the…

Question

If total spending is less than total output, then price levels will
Select one:
a. rise and output will increase.
b. fall and output will decrease.
c. fall and output will increase.
d. rise and output will decrease.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

The Consumer Price Index is subject to the substitution bias and me quality/new goods bias. Are the Producer Price index and the GDP deflator also subject to these biases? Why or why not?
12. If _____ is rising, it likely means that the economy is shrinking. A. consumer spending B. nominal GDP C. the Consumer Price Index D. the unemployment rate
3 Which of the following is correct about real GDP? a. All of the options b. It is corrected for inflation c. It is GDP calculated at constant price level d. It shows true picture about the output of a country
4. Compute the percentage increase in real GDP from 2004 to 2005.a. 0 percentb. 7 percentc. 22 percentd. 27 percent *base year is 2003
#3 If the economy starts at Y, then a recession occurs at X. Z. V. W.
Need help with this. 1. Spending - Included in the U.S. GDP for 2020, or not included ? If so, under which expenditure category (C, I, G, X etc,?) If not, why not? A.You buy a $20,000 new Toyota made in San Antonio. ____________________ B. Microsoft buys a $20,000 new Toyota made in San Antonio ________________ C. Kendrick Jones, of Alberta, Canada, buys a $20,000 new Toyota made in San Antonio_______________ D. You buy $20,000 in General Motors Corporation stock ___________________ E. You pay a lawyer $2,000 to sue your neighbor for building a fence on your land, and lose the suit. ________________________ F, You buy your neighbor’s used fence for $1,000. _________________________ H. You pay Alamo Colleges $1200 tuition for classes you took during 2020 ____________________________ I. The federal government sends Nruce Borton a social security check for $600 during 2020. _______________________________ J. The San Antonio Independent School District pays Ricki Kicker $55,000…
You did some work on it. Sub parts to be completed/solved. Need help with this 1. Spending - Included in the U.S. GDP for 2020, or not included ? If so, under which expenditure category (C, I, G, X etc,?) If not, why not? A.You buy a $20,000 new Toyota made in San Antonio. ____________________ B. Microsoft buys a $20,000 new Toyota made in San Antonio ________________ C. Kendrick Jones, of Alberta, Canada, buys a $20,000 new Toyota made in San Antonio_______________ D. You buy $20,000 in General Motors Corporation stock ___________________ E. You pay a lawyer $2,000 to sue your neighbor for building a fence on your land, and lose the suit. ________________________ F, You buy your neighbor’s used fence for $1,000. _________________________ H. You pay Alamo Colleges $1200 tuition for classes you took during 2020 ____________________________ I. The federal government sends Nruce Borton a social security check for $600 during 2020. _______________________________ J. The San…
1. Spending - Included in the U.S. GDP for 2020, or not included ? If so, under which expenditure category (C, I, G, X etc,?) If not, why not? A.You buy a $20,000 new Toyota made in San Antonio. ____________________ B. Microsoft buys a $20,000 new Toyota made in San Antonio ________________ C. Kendrick Jones, of Alberta, Canada,goes to Toronto Autos to buy a $20,000 new Toyota made in San Antonio_______________ D. You buy $20,000 in General Motors Corporation stock ___________________ E. You pay a lawyer $2,000 to sue your neighbor for building a fence on your land, and lose the suit. ________________________ F, You buy your neighbor’s used fence for $1,000. _________________________ H. You pay Alamo Colleges $1200 tuition for classes you took during 2020 ____________________________ I. The federal government sends Nruce Borton a social security check for $600 during 2020. _______________________________ J. The San Antonio Independent School District pays Ricki Kicker $55,000…
The economy of Fantasia produces only 2 goods namely Shoes and Computers. The total productionand average prices of shoes and computers are displayed in Table 2 attached. (a)Explain why nominal GDP in 2020 differs from real GDP in 2020 (b) Calculate the changes in prices for both products. How much has price changed from 2019 to2020?
If nominal GDP grows by 7% but inflation rises 3%, what is the real GDP?
a. The paradox of thrift is based on a circular flow of the economy in which current spending drives future spending. Explain the paradox of thrift. b. Why do you think households’ purchase of new housing is included in the investment components of GDP rather than the consumption component? c. What is the difference between GDP and GNP? Which one is the better measure of income? Why?
Suppose that over the last three years, there has been a 10% increase in real GDP, but a 5% increase in nominal GDP, we might conclude thata) The economy has entered a recession.b) The price level has increased, with 5% inflation.c) The price level has decreased, with 5% deflation.d) The economy has experienced a combination of low growth and inflation.