Inventories growing happens when A) The economy is at equilibrium In a economic contraction phase In an economic expansion phase D It is not related B
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- q4. suppose that economy is charactarized by the following equations solve (a. b. c. d)Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagramWhen we say that economic fluctuations are “irregular and unpredictable,” we mean thata. the relationship between output and unemployment is erratic and difficult to characterize.b. when one macroeconomic variable that measures income or spending is falling, other macroeconomic variables that measure income or spending are likely to be rising.c. recessions do not occur at regular intervals.d. All of the above are correct.
- When an economy is experiencing a recessionary gap, the likely outcome is a) quickly rising output prices. b) an increase in the number of workers receiving employment -insurance benefits. c) the number of employment - insurance recipients being the lowest ever . d) consumers optimistic about the future.onsider the economy described by the following equations: C = 1,600 + 0.9 (Y – T) I p = 800 G = 1,600 NX = 200 T = 1,600 Y* = 29,000 a. Complete the table shown below to find short-run equilibrium output. Consider possible values for short-run equilibrium output as they are given in the table below.Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. OutputY Planned aggregate expenditure (PAE) Y – PAE Y = PAE? 27,200 (Click to select) Yes No 27,400 (Click to select) No Yes 27,600 (Click to select) No Yes 27,800 (Click to select) No Yes 28,000 (Click to select) No Yes b. Short-run level of equilibrium output: c. What is the output gap for this economy? Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. The actual unemployment rate should…Following a demand-side recession, what happens to full employment GDP (C+I+G) after a few recessions and over-expansion? Why is this composition problematic for the long run?
- Table 24.4 describes Santhers economy. Plot the AD/AS curves and identify the equilibrium. Would you expect unemployment in this economy to be relatively high or low? Would you expect prices to be a relatively large or small concern for this economy? Imagine that input prices fall and so AS shifts to the right by 150 units. Identify the new equilibrium. How will the shift in AS affect the original output, price level, and employment?Economists expect that as the labor market continues to tighten going into the latter part of 2015 that workers should begin to expect wage increases in 2015 and 2016. Assuming this occurs and it was the only development in the labor market that year, how would this affect the AS curve? What if it was also accompanied by an increase in worker productivity?A number of macroeconomic variables decline during recessions. One of these variables is the GDP. 1. What other variables, besides real GDP, tend to decline during recessions? Given the definition of real GDP and its components, explain the declines in these economic variables which are to be expected. 2. Empirical studies indicate that the long-run trend in real GDP of the USA has an upward trend. How is this possible given business cycles and macroeconomic fluctuations? What factors explain the upward trend in spite of the cycles?
- What industry sectors are most likely to add jobs during a down economy and an improving economy respectively? Are there employment sectors that are essentially unaffected by economic fluctuations?Describe the following term in your own words. StagflationA movement along the economy's AS curve could be caused by a change in technology. the price level, caused in turn by an AD shock. the wage rate. labour productivity. the cost of capital