Question:- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports. b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India. c) Inflation rate in the country has reached 6.73%

Question:- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports. b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India. c) Inflation rate in the country has reached 6.73%

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter24: The Aggregate Demand/aggregate Supply Model

Section: Chapter Questions

Problem 42CTQ: On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because...

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Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.
2- : If aggregate demand is constant in an economy and aggregate supply decreases in the short run, which of the following statements is correct for the new equilibrium point? a) price goes up national income goes up B) price goes down national income goes down NS) price goes up national income goes down D) price goes down and national income goes up TO) price goes up national income does not change
Subject :- Economy Consider a scenario of a closed economy in the short run where price level is fixed. Assume that both taxes and money supply increase in a way that keep output constant in equilibrium (suppose that the marginal propensity to consume is less than one). Which of the following may result from the policy change? a) It will lead to an increase in investment but a decrease in consumption. b) It will result in an increase in investment but a decrease in government spending. c) It will lead to an increase in investment and private saving. d) It will decrease investment but increase in public saving
Suppose the economy is operating at potential GDP when It experiences an increase in export demand. How might the economy increase production of exports to meet this demand, given that the economy is already at full employment?
Question 7 The model of aggregate demand and aggregate supply Answer is different from the model of supply and demand for a particular market, in that we cannot focus on the substitution of resources between markets to explain aggregate relationships. is different from the model of supply and demand for a particular market, in that we have to separate real and nominal variables in the aggregate model. is a straightforward extension of the model of supply and demand for a particular market, in which substitution of resources between markets is highlighted. is a straightforward extension of the model of supply and demand for a particular market, in which the interaction between real and nominal variables is highlighted. Question 8 When the price level falls the quantity of Answer consumption goods demanded rises, while the quantity of net exports demanded falls consumption goods demanded and the quantity of net exports demanded both rise. consumption goods demanded and the quantity of…
Assume that the macro-economy is initially in short -run equilibrium. What happens to the equilibrium price level and equilibrium level of real GDP if interest rates in the economy fall? Question 4 options: a) Both the equilibrium price level and the equilibrium level of real GDP decrease. b) The equilibrium price level increases and the equilibrium level of real GDP decreases. c) Both the equilibrium price level and the equilibrium level of real GDP increase. d) The equilbrium price level falls and the equilibrium level of real GDP increases.
Question 3 on Topics 6 & 7 COVID-19 has sent the economy of Classica into recession. The finance ministry has advised the government to lower stamp duty and other purchase service charges for those wanting to buy existing houses in order to boost economic growth. As well, the finance ministry wants the government to also cut company taxes as this will lead to firms increasing their level of investment in the economy. The President of Classica has asked you, as her chief economic advisor, for your views. In particular, she wishes to know the following: Would a cut in stamp duty and other purchase charges on the purchase of existing houses really boost the economy? Your advise on this is ____________________ (provide your answer and justification on both the immediate and future impact. Feel free to use external resources to assist you in your answer if you prefer). Is the claim that lower company taxes adding to…
Assume that the macro-economy is initially in short -run equilibrium. What happens to the equilibrium price level and equilibrium level of real GDP if households believe the economy is heading into a recession? Question 11 options: a) Both the equilibrium price level and the equilibrium level of real GDP increase. b) The equilibrium price level increases and the equilibrium level of real GDP decreases. c) Both the equilibrium price level and the equilibrium level of real GDP decrease. d) The equilibrium price level falls and the quilbrium level of real GDP increases.
No1 ) Rob works as a loan officer for a major U.S. commercial bank, specializing in international loans. When considering loans to governments and businesses in other nations, Rob Multiple Choice must be aware of federal limits on the total amount of U.S. funds his bank can lend to foreign borrowers. can only make loans if his bank has funds in excess of those sought by American firms. is likely to approve loans to foreign borrowers if the return is high enough to justify the risk. must increase the dollar volume of loans they make to customers. must pay more to borrow from the Fed. have fewer funds available for lending. will find their balance sheets temporarily out of balance. must be careful to get approval from the International Monetary Fund. No. 2) When the Fed increases the reserve requirement, banks Multiple Choice must increase the dollar volume of loans they make to customers. must pay more to borrow from the Fed.…
Question 3 B) Assume the Pakistan’s economy is in recession: Pakistan implements a combination of expansionary fiscal and monetary policy. In the absence of complete crowding out what will be the effect of these policies on each of the following: (Maximum 150 words) i. Aggregate demand in Pakistan ii. The price level in Pakistan iii. Interest rates in Pakistan
Question 27 The slope of a long-run aggregate supply curve is vertical, because full-employment output depends directly on the price level. vertical, because full-employment output is independent of the price level. horizontal, because full-employment output is independent of the price level. upward sloping, because as the price level rises, firms will increase output. upward sloping, because rising prices reduce real wealth and spending. Question 28 Supposed you are offered a job with Amazon upon graduation. Your starting salary will be $70,000 which will put you in the 22% federal income tax bracket. The total amount of income taxes you pay is $11,285.50. Your average tax rate is approximately ______. 25.0% 16.1% 21.3% 13.3% 11.5% Question 30 The largest portion of the federal budget is…
Question #4. Individual income taxes directly affect personal disposable incomes which in turn affect the domestic demand for goods and services. Production costs depend substantially on oil prices. Market expectations are: (1) income taxes in the U.S. will decline and (2) oil prices will remain relatively unchanged. Using market expectations, what do you expect the U.S. output and prices next year? Assume we are moving from the old equilibrium to a new equilibrium. Please state clearly your assumptions and include a graph to support your answer.