On the following graph, the black line shows potential real GDP and the blue line shows actual real GDP for a hypothetical country from 1990 to 2010. Use the green quadrilateral (triangle symbols) to shade the area between actual and potential real GDP that represents the positive GDP gap. Then use the purple quadrilateral (diamond symbols) to shade the area between actual and potential real GDP that represents the negative GDP gap. GDP (Billions of 2000 dollars) 10 9 8 10 d 2 1 0 Actual Real GDP 1990 Potential Real GDP 1994 1998 YEAR 2002 2006 2010 Positive GDP Gap Negative GDP Gap ? Which of the following are true of an economy operating below full employment? Check all that apply. Actual real GDP is less than potential real GDP. The economy is in the peak phase of the business cycle. The economy has an unemployment rate higher than the natural rate of unemployment. soo worker is more likely to be unemployed than an older worker

On the following graph, the black line shows potential real GDP and the blue line shows actual real GDP for a hypothetical country from 1990 to 2010. Use the green quadrilateral (triangle symbols) to shade the area between actual and potential real GDP that represents the positive GDP gap. Then use the purple quadrilateral (diamond symbols) to shade the area between actual and potential real GDP that represents the negative GDP gap. GDP (Billions of 2000 dollars) 10 9 8 10 d 2 1 0 Actual Real GDP 1990 Potential Real GDP 1994 1998 YEAR 2002 2006 2010 Positive GDP Gap Negative GDP Gap ? Which of the following are true of an economy operating below full employment? Check all that apply. Actual real GDP is less than potential real GDP. The economy is in the peak phase of the business cycle. The economy has an unemployment rate higher than the natural rate of unemployment. soo worker is more likely to be unemployed than an older worker

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter19: The Keynesian Model In Action

Section: Chapter Questions

Problem 8SQP

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Please answer the question: * the attached photo is for you to see that it is connected to the question * If current real GDP is P700 billion, which of the following policies would bring the economy to potential output? a. decrease taxes by P100 billion b. increase taxes by P100 billion c. decrease taxes by P25 billion d. increase taxes by P25 billion
34. The National defense consumption expenditures and gross Investment for the 4th quarter of 2019 is: $______ billions. 35. The National defense consumption expenditures and gross Investment for the 4th quarter of 2017 is: $______ billions. 36. The change in the National defense consumption expenditures and gross Investment, from 4th quarter of 2017 to the 4th quarter of 2019 is: ______ billions. 37. Comparing the change in current tax receipts (questions 16 through 18) and current expenditures (questions 28 through 30), is it fair to say that the Trump tax cut was a huge contributor to the increase in the government budget deficit? YES NO 38. Based on questions 13 through 37, which of the following seems to be the biggest contributing factor to the increase of the federal government budget deficit? a) Decease in tax revenue collected b) Increase in government social benefits c) Increase in the military budget
Suppose real GDP is currently $12.5 trillion and potential real GDP is $13 trillion. If the president and Congress increased government purchases by $500 billion, what would be the result on the economy?
Using a macroeconomics demand/supply analysis, where do you think current output is relative to what the economy is capable of producing? Look at recent trends in the data. What are the recent trends in the components of aggregate demand (consumption spending, investment spending, government purchases, and exports and imports?
Which of the following occurs as investment becomes more responsive to changes in the interest rate? Select one: a) . Monetary policy becomes more effective at changing real gross domestic product. b)There is no change in the effectiveness of either monetary or fiscal policy. c) Fiscal policy becomes more effective at changing real gross domestic product. d) Monetary policy becomes more effective at changing interest rates.
To what does the “GDP gap” refer? Group of answer choices The difference between real GDP in the prior trough and real GDP in a current trough of the business cycle. The difference between this year’s real GDP and last year’s GDP. The difference between real and nominal GDP. The difference between “full-employment” real GDP and actual real GDP.
Based on the data in the table and graph below, identify the equilibrium GDP: Price Level Real GDP/Output in $ billion Real GDP/Spending in $ billion 80 100 180 90 120 160 100 140 140 110 160 125 120 170 115 130 175 105 140 178 100 Real GDP ($ billion) is charted on the x-axis (range 80-200). Price Level is charted on the y-axis (range: 60-150). The AS curve begins at (80,100) and ends at (179, 140), ascending up left to right. This curve intersects with the AD curve at (140,100). The AD curve begins at point (100, 140) and ends at (180, 80), descending left to right.
Why is the potential GDP line vertical? The potential GDP line is vertical because _______. A. potential GDP is dependent on the price level B. with a constant money wage rate, the real wage rate rises as the price level rises C. potential GDP and the quantity of real GDP supplied are equal at every price level D. potential GDP is independent of the price level
In the above figure, which of the following policies could move the economy to potential GDP? Group of answer choices increasing government expenditures and decreasing taxes decreasing government expenditures and increasing taxes decreasing taxes and not changing government expenditures increasing government expenditures and not changing taxes
Use an aggregate demand and supply diagram to illustrate and explain how each of the following will affect the equilibrium price level and the real GDP. Describe and analyze the new situation (inflationary gap, recessionary gap, stagflation). How should the situation be rectified in order to return to full employment?• Consumers expect a recession• Foreign income rises• Foreign price levels fall• Government spending increases• Workers expect high future inflation and negotiate higher prices now• Technological improvement increase productivityQUESTION: How should the situation be rectified in order to return to full employment?
Use the following information on economy X to answer the questions below. Consumption function: C = 250 + 0.8YInvestment spending: I = 150Government spending: G = 500Exports of goods and services: X = 200Imports of goods and services: Z = 150Proportional tax rate: t =25%Full employment level of income = 3575 Q.4.1.1 Calculate total autonomus spending for economy X.
Briefly describe the difference between a so-called real business cycle and a more traditional “spending” business cycle.