The GDP that an economy should produce, given its existing levels of structural variables like labor, costs, productivity, and regulations, is called: A) aggregate supply. B. aggregate demand. potential GDP. real GDP.
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- Explain the effect of national income when price is flexible due to the following situation: a) An increase in the money supply. b) A reduction in government spending. (explain with graphs)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?Malaysia GDP to rebound up to 7.5% in 2021, central bank predicts The Malaysian economy is expected to grow between 6% and 7.5% this year, the central bank said on Wednesday, with COVID-19 vaccinations and stronger external demand driving a recovery from the 5.6% contraction for 2020. Central bank Governor Nor Shamsiah Yunus said growth this year would also be underpinned by higher private and public expenditures, while an accelerating immunization campaign will improve confidence. "The Malaysian economy is projected to rebound in 2021, with the gross domestic product achieving pre-COVID-19 levels by mid-2021,". The new full-year estimate leaves slightly more room at the low end, compared with a previous forecast of 6.5% to 7.5% expansion. "In our forecast, we assume that herd immunity will only be achieved in the first quarter of 2022," Nor Shamsiah explained. She also said the bank considered that Malaysia's international borders could remain largely closed for the entire year, but…
- Suppose an economy has two years worth of data, years 1 and 2. Sup- pose there are also two goods, bread and corn. Suppose in year one fifty units of corn are sold at a price of 1 $ and 20 units of bread are sold at a price of 2 $. Suppose in year two, 60 units of corn are sold at a price of 1.5 $ and 80 units of bread are sold at a price of 2.05 $. Compute nominal GDP in both periods. Compute real GDP under both definitions of a base year. Compute also a chain weighted real GDP series. For all three measures, compute the GDP deflator. In addition, compute a CPI’s for each base year assuming total consump- tion in the base year forms the basket of goods for measurement. What are the implications for these measures for the amount of inflation in this economy. [Note, you should have five candidate measures]. What about the amount of economic growth? Suppose that corn in year 2 is twice as valuable as corn in year 1 to consumers in terms of their enjoyment from its consumption (or in…a. What is the equilibrium rate of real GDP? $ __ billion b. If full-employment real GDP is $800 billion, what problem does this economy have? multiple choice This economy has a recessionary gap. This economy has an inflationary gap. This economy does not have a problem. c. How large is the real GDP gap? $ __ billionMatch the term to the definition Occurs when equilibrium GDP is greater than full employment GDP Occurs when equilibrium is less than full employment GDP A. Recessionary GAP B. Inflationary Gap
- Potential GDP refers to a. the level of output that an economy can produce when all resources (land, labor, capital, and entrepreneurial ability) are fully employed. b. the level of output that an economy can produce when all resources (land, labor, capital, and entrepreneurial ability) are not fully employed. c. an abstract conception developed by economists. d. an unreal expectation of the government.The government decides to levy a lump-sum taxes by $50 billion which will reduce disposable income. If the MPS=0.25, what effect will this have on GDP?If firms produce goods but does not sell them to final consumers these increases in inventory accumulation are counted as A.) Business investment B.) Depreciation C.) Research and development cost D.) Government spending
- In the economy of Kwartengland, the following figures are given for economic activity which was undertaken in 2013. All the figures are million Ghana Cedis Consumption Expenditure = 1000 + 0.8 YD Investment Spending= 600 Government Expenditure = 2450 Personal Taxes= 100 Exports= 100 Imports= 150 1. Calculate the investment and tax multipliers 2. By how much should exports change if government wishes to increase real GDP by 1000?Macroeconomics: Assuming marginal propensity to consume is 0.5. If there is a shock to the economy that increases investment spending by 200 billion dollars what will the total Change to GDP be? (Ignore taxes and imports)True or False Any change in spending (C, I, or G) will set off a chain reaction, leading to a multiplied change in GDP