In the circular flow model when the level of savings is higher than the level of investment, the: Economy is in equilibrium National level of income is increased Firms level of production decreased Economy expands
Q: Two key macroeconomic indicators that provide insight into the standard of living in an country are:…
A: Answer: Standard of living is generally measured by the amount of goods and services available to…
Q: Which statement below is false regarding the circular flow diagram? It depicts interaction…
A: In a circular flow diagram major exchanges in an economy are represented as flow of money, goods and…
Q: Which of the following is the proper sequence of events in a business cycle model? Peak, GDP falls,…
A: When talking about business cycle, it is the cyclical process that is followed by the market based…
Q: An open economy is described by the following system of macroeconomic equations, in which all…
A: “Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: The income and expenditure approaches to measuring a nation’s GDP can be combined using the circular…
A: Aggregate demand shows the total demand for all goods and services in an economy. There are five…
Q: Please place all of the items that would make the given statement true. If the item would create a…
A: In an economy, when computing national income, there are various components that influence the value…
Q: Exercise 1 (45%): In the textbook, Model I is the least complicated way to define the relations in…
A: Open economy model where all sectors of economy is included AD= C+I+G+NX( export-import )
Q: In the Real Business Cycle model, what is the effective investment and the equilibrium investment?
A: The theory of the real business cycle has been developed from new classical macroeconomics where the…
Q: Given the following closed economy model: C = .8Yd + 800 I = 1000 G = 6000 T = .25Y + 100 Yf =…
A: Given, C = .8Yd + 800 I = 1000 G = 6000 T = .25Y + 100 Yf = 21,000
Q: When an economy goes into a recession (a decline in GDP) government savings usually Select one: a.…
A: Reccession means slowing down of business and economic activities in the economy. This means less…
Q: Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line…
A: Aggregate expenditure is the total consumption of final goods during an accounting year. AE=…
Q: nsider the economic model: Yt Ct +i %3D Ct myt-1 it act-1 here y is GDP, c is consumption, i is…
A: Gross domestic product (GDP) is the standard measure of the value added created through the…
Q: Why do economists and managers pay attention to the measurements of macroeconomic activity? several…
A: Answer - Economist and managers pay attention to many measurment of macroeconomics activity " GDP…
Q: In an economy, people like to eat and spend for restaurant foods. This change in behavior causes…
A: We are going to discuss the effect of change in behavior of agents in the economy on the overall GDP…
Q: Investment spending (I) Net taxes (NT) Net exports (X - IM) Consumption (C) Government purchases (G)
A: 1)Disposable income-National income 2)Investment spending-aggregate demand 3)Net taxes-national…
Q: According to the textbook definition, a recession occurs if ___ GDP decreases for ____ Question…
A: If nominal GDP decreases for consecutive 2 quarters,then recession occurs.
Q: Macroeconomics analyzes the growth in production, employment and income of a country in relation to…
A: We study macroeconomics for a better tomorrow. It studies an economy as a whole. Macroeconomics…
Q: In the "circular flow model" of a macro economy, the population is growing savings are large enough…
A: The circular flow of income shows how money flows between households and firms
Q: how the US GDP has performed from January 2017 to August 2021. (i) Excluding COVID-19 reason,…
A:
Q: How do each of the following transactions affect Canada’s GDP? Unless otherwise indicated, assume…
A: Gross Domestic Product is the sum total of market value of final goods and services produced in a…
Q: Given the following data on a simple closed economy: C= 10 +0.75 Y I = 20 G = 40 where C is…
A: Given information: C = 10 + 0.75Y ------------> Consumption function I = 20…
Q: The aggregate change of consumption, Ċ(t) and the aggregate change of the capital stock, K(t), are…
A: A steady-state economy aims to achieve a balance between population and production growth. The…
Q: According to the IS-LM model, what happens to the interest rate,income,consumption and investment
A: IS-LM is an acronym for "investment savings-liquidity preference-money supply."The IS-LM model shows…
Q: Part (a) In Japan, from the 1990s to the late 2000s, the interest rates fell to very low levels.…
A: Growth of nation is related to their GDP- a rising GDP indicates rising growth whereas a falling GDP…
Q: economy, firms tend to hold 30% of output as inventory. i. If in a period 1, total output is 200…
A: Inventory is the unrefined substances used to create products as well as the merchandise that are…
Q: Which of the following is true about the real GDP? a. It is equal to nominal GDP multiplied by the…
A: The economics as a study is based upon the basic idea that the resources which are present with the…
Q: "The national-level saving rate is important from a macroeconomic perspective, in he sense that…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: After reading the statement below you will choose 2 answers! Determine where this transaction…
A: The economies tend to work upon the basis of the expenditures which various entities get involved…
Q: State the three possible relationships between production, income and spending in macroeconomic…
A: The connection between production, income and spending is frequently called a utilization plan. It…
Q: What happens in the circular flow model during a recession.
A: The circular flow model represent show money flows from one economics sector to another and how it…
Q: Distinguish between the following concepts as they apply to Elements of Macroeconomics. Give…
A: The difference between nominal GDP and real GDP. Nominal GDP Real GDP The value of the final…
Q: Determine whether the following scenarios would increase, decrease or have no impact on potential…
A: Potential GDP refers to the maximum output that an economy can generate or manufacture with the…
Q: The University of Chicago, a privately-owned school, is currently building a new hospital. This…
A: Capital investment:- It can be defined as the amount that is invested by the companies to continue…
Q: The economy can be represented by economic models. One of the models we use to understand the…
A: 1) Circular flow diagram is a model which represents the flow of money and good and services from…
Q: If Saving+Tax+Import > Investment+Government spending+Export, then _____ must fall to establish…
A: Here, it is given that the aggregate demand (Investment+Government spending+Export) is less then the…
Q: The table below shows aggregate values for an economy where real GDP equals potent output. Potential…
A: Saving = Private saving +Public Saving. Private saving = GDP -Taxes -Consumption. Public saving =…
Q: Capital goods are goods that will be used in the future to produce more goods and services. Group of…
A: (a)Capital goods are those tangible assets that are used to produce goods for consumption at the…
Q: Country A produces GDP according to the following equation: GDP = 5√K and has a capital stock of…
A: Gross domestic product is the sum of the market values of all the goods and services produced…
Q: What is the central economic idea humorously illustrated in Art Buchwald’s piece, “Squaring the…
A: Recession: It is a macroeconomic term that alludes to a huge decrease by large monetary movement in…
Q: circular-flow model of a simple economy. The outer set of shows the corresponding flow of inputs and…
A: There are different types of sector model such as 2-sector model, 3-sector model, 4-sector model. In…
Q: Using the circular flow model, explain what might happen to the level of income of an economy if it…
A: If it is experiences an increase in exports then it causes an increase to the level of income…
Q: Comment with the help of example and graphically as wel
A: An increase in the savings ratio can have a major impact on economic activity. Savings and…
Q: Exercise 1 (45%): In the textbook, Model I is the least complicated way to define the relations in…
A: We know AD = C+ I + G + NXM . Where c= consumption expenditure I = investment expenditure G =…
Q: Match the scenarios given to the government expenditure. Then state the government program, whether…
A: Gross Domestic Product (GDP) is defined as the final value of all the goods and services produced in…
Q: _________ is calculated by taking _________ and then subtracting the value of how much physical…
A: option 2 is the correct answer NNP, GNP this is fit to difining the term and hence and 1,3…
Q: If the population of a country grows and increases both the labor force and the demand for…
A: GDP is the value of final goods and services produced in the economy within a given period of time.
Q: You are given the following data. Calculate GNP and GDP at factor cost. GNPMP 600 Indirect Taxes 50…
A: Macroeconomics analyzes the economy as a whole. It studies aggregate economic concepts such as…
Q: Explain in details the model graph in the North West Government North-West economy LRAS SRAS P1 E1…
A: Graph is related with AS AD model . Where LRAS is vertical line which means that production can't be…
help
Step by step
Solved in 2 steps
- According to the following information answer the questions. Macroeconomic Indicators: Country A Household final consumption: $40.3 billions Government final consumption: $15.7 billions Budget balance: $-3.8 billions Total Investment: $14.4 billions Exports of goods and services: $18.6 billions Imports of goods and services: $16.5 billions Country A's net capital inflow = $____billions Your AnswerTrue or false? Consider two economies that spend different shares of their gross domestic product to R&D activities. Is it true that the economy with a larger share of R&D spending grows faster in the long-run?From the table below answer, the following questions in the spaces provided, consider the following data (in billion $) for a country in a particular year: (Personal consumption expenditure (C 1000 (Exports (x 120 (Government Purchases of goods and services (G 400 (Imports (m 110 Gross Domestic Product (Y) 4,500 (Taxes (T 200 5) What is the value of gross investment (I)? Answer 6) What is the amount of investment financed by national savings? Answer 7) What is the amount of investment financed by borrowing from or lending to the rest of the world? Answer
- Using the circular flow model, explain what might happen to the level of income of an economy if it experiences an increase in exports and an increase in taxes.How so gains in worker productivity lead to gains in per capita GDP? A. as workers produce, their wages will rise and they will have more disposable income for consumption, leading to a rise in GDP per Capita. B.The amount a worker can produce and that worker's income are exactly equal so that these numbers stay the same. C.The amount a worker can pproduce and that workers's income are not always exactly equal, so these numbers may differ. D. An aggregate production function describes the input of an entire economy based on various outputs such as capital, labor and technology.In the circular flow model: a) income and expenditures are equal. b) investment comes from government tax policy. c) consumption expenditures fund investment. d) the value of income earned by the government is determined by the foreign sector
- Suppose that in the country of Economia: Net Investment = $20 billion, Depreciation = $70b, Net Exports = $30b, Taxes = $90b, Government Expenditure = $60b, Imports = $70b, Consumption = $120b. What does GDP equal in Economia? Select one: a. $300 billion b. $270 billion c. $250 billion d. $230 billion e. $210 billionAssume a three-sector economy where: Y= C+I+G, C=C0 + bY, and I=I0= 83; G=G0 =27. Assume further that C0 = 93; b=0.84. Find the value of I. Income (Y) and II. Consumption (C) of this economy.Suppose the government increases expenditure towards education and training programs. The intended effect at the macroeconomic level would be? a.To increase net exports, which in turn increases GDP. b.To increase government spending, which in turn increases GDP. c.To increase consumption, which in turn increases GDP. d.To increase private investment today, which in turn increases GDP.
- In year 1, a country has saving rates, s=0.1, productivity a=2 and depreciation rate d=0.1 . In year 2, the same country has s=0.1, a=1, d=0.2 Using the endogenous growth model, find the economy’s growth rate in year 1 and What is the state of the economy in year 1? (Use business cycle words) Using the endogenous growth model, find the economy’s growth rate in year 2.What is the state of the economy in year 2? (Use business cycle words) If in year 1, delta c/c=0.2, delta u /u =-0.1 and in year 2, deltac/c=-0.1, delta u/u =0.15 , describe the variables and using business cycle words Please answer the business cycle explanation part!In the circular flow model, the factors of production flow in the?The Clark-Fisher model explains the significant shift within the economy over time by emphasizing: a. The breakthroughs in Artificial Intelligence (AI) and Machine Learning (ML) systems. b. Mechanization, modernization, and Automation (MMA). c. The movement of labor force from high productivity sectors to low productivity sectors. d. The movement of labor force from low productivity sectors to high productivity sectors.
