MACROECONOMICS W/ MY ECON LAB
6th Edition
ISBN: 9781323460689
Author: Hubbard
Publisher: PEARSON C
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 10.3.7PA
To determine
The economic situation.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
The magazine Women of China reported that Chinese women in big cities spent 63% of their income on consumer goods last year, up from a meagre 26% in 2007. Clothing accounted for the biggest chunk of that spending, at nearly 30%, followed by digital products such as cellphones and cameras (11%) and travel (10%). Chinese consumption as a whole grew faster than the overall economy in the first half of the year and is expected to reach 42% of GDP by 2020, up from the current 36%.
Source: The Wall Street Journal, August 27, 2010
If the economy had been operating at a full employment equilibrium,
(a) Describe the macroeconomic equilibrium after the rise in consumer spending.
(b) Explain and draw a graph to illustrate how the economy can adjust in the long run to restore a full-employment equilibrium.
In briefly Explain the government budget deficit and debt and how this can cause crowding out for loanable funds in the market.?
Assume the following to answer the following question:
C= 1000+ .9 (Y-T)
Tax rate = 0.1Y
Imports = 0.1(Y-T)
Government spending = 200
Investment = 300
Exports = 600
Potential Output = $8000
What is the current GDP in this economy?
Chapter 10 Solutions
MACROECONOMICS W/ MY ECON LAB
Ch. 10 - Prob. 10.1.1RQCh. 10 - Prob. 10.1.2RQCh. 10 - Prob. 10.1.3RQCh. 10 - Prob. 10.1.4RQCh. 10 - Prob. 10.1.5PACh. 10 - Prob. 10.1.6PACh. 10 - Prob. 10.1.7PACh. 10 - Prob. 10.1.8PACh. 10 - Prob. 10.1.9PACh. 10 - Prob. 10.1.10PA
Ch. 10 - Prob. 10.1.11PACh. 10 - Prob. 10.1.12PACh. 10 - Prob. 10.1.13PACh. 10 - Prob. 10.1.14PACh. 10 - Prob. 10.2.1RQCh. 10 - Prob. 10.2.2RQCh. 10 - Prob. 10.2.3RQCh. 10 - Prob. 10.2.4RQCh. 10 - Prob. 10.2.5PACh. 10 - Prob. 10.2.6PACh. 10 - Prob. 10.2.7PACh. 10 - Prob. 10.2.8PACh. 10 - Prob. 10.2.9PACh. 10 - Prob. 10.2.10PACh. 10 - Prob. 10.2.11PACh. 10 - Prob. 10.2.12PACh. 10 - Prob. 10.2.13PACh. 10 - Prob. 10.2.14PACh. 10 - Prob. 10.2.15PACh. 10 - Prob. 10.2.16PACh. 10 - Prob. 10.2.17PACh. 10 - Prob. 10.3.1RQCh. 10 - Prob. 10.3.2RQCh. 10 - Prob. 10.3.3RQCh. 10 - Prob. 10.3.4PACh. 10 - Prob. 10.3.5PACh. 10 - Prob. 10.3.6PACh. 10 - Prob. 10.3.7PACh. 10 - Prob. 10.3.8PACh. 10 - Prob. 10.3.9PACh. 10 - Prob. 10.3.10PACh. 10 - Prob. 10.1RDECh. 10 - Prob. 10.2RDECh. 10 - Prob. 10.3RDE
Knowledge Booster
Similar questions
- If you read in the newspaper that the United States’ 2015 real GDP declined while nominal GDP for 2015 grew, how could you explain this?arrow_forwardConsider the following hypothetical data for the U.S. economy in 2018 (all amounts are in trillions of dollars; see pages 179–182).Consumption 11.0 Indirect business taxes .8 Depreciation 1.3 Government spending 3.8 Imports 2.7 Gross private domestic investment 4.0 Exports 2.5e. Based on the data, what is GDP? NDP? NI?f. Suppose that in 2019, exports fall to $2.3 trillion, imports rise to $2.85 trillion, and gross private domestic investment falls to $3.25 trillion. What will GDP be in 2019, assuming that other values do not change between 2018 and 2019?arrow_forwardBriefly explain the role played by banks between savers and borrowers and the economic benefit, if any, derived from their taking on this role.arrow_forward
- 1. According to the BEA, in the second quarter of 2012 personal consumption expenditures grew by 1.7 percent, gross private domestic investment grew by 3.0 percent, government expenditure on goods and services decreased by -0.9 percent, imports grew by 2.9%, and exports grew by 6.0%. Given these data, it is most likely that A) GDP growth was positive in the 2nd quarter. B) GDP growth was negative in the 2nd quarter. C) the economy hit a business cycle peak. D) the economy hit a business cycle trough. 2. In the national income accounts, government expenditure on goods and services exclude A) transfer payments. B) state and local government purchases. C) local government purchases but include state government purchases. D) spending on national defense. 3. Transfer payments A) are included in the government expenditure category in gross domestic product. B) refer to all payments made to households by governments. C) refer to payments made by the government that are not made to…arrow_forwardPlease explain how a rise in the household saving rate can cause a fall in GDP?arrow_forwardHow would a person buying shares of common stock and paying a commission affect are countries GDP in the current year? briefly explain your answer in each casearrow_forward
- Research on the effects of recessions on the real level of GDP shows that recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase. recessions cause large, permanent reductions in the real level of GDP. recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary. recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.arrow_forwardGovernment sometimes intervene to stabilize the economy. As such, briefly explain why the Bangko Sentral ng Pilipinas may attempt to weaken the peso.arrow_forward1. Answer the following: A) In 2011 the United States economy had a GDP of $14,991 billion according to the United Nations. If consumption was $10,729 billion, government spending was $2,594 billion, and net exports was -$568 billion, how much was investment spending? B) In 2011 the United States economy had a GDI (Gross Domestic Income) of approximately $13,548 billion according to the Bureau of Economic Analysis. If wages were $8,340 billion, interest payments were $516 billion, and rent was $430 billion, approximately how much was remaining for profit?arrow_forward
- Briefly discuss THREE economic policies that encourages household savings.arrow_forwardIn the fifty years before the covid-19 pandemic, the U.S. also suffered two deep recessions, in 1981-82 and 2007-2009. (As you know, the second was the Great Recession.) Based on the historical evidence in the chart, about how high does the unemployment rate rise in terrible recessions like those? Briefly explain.arrow_forwardThe following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. (Graph in image) (a. Saving, b. Investment) is the source of the supply of loanable funds. As the interest rate falls, the quantity of loanable funds supplied (a. increases, b. decreases). Suppose the interest rate is 4.5%. Based on the previous graph, the quantity of loanable funds supplied is (a. greater, b. less) than the quantity of loans demanded, resulting in a (a. surplus, b. shortage) of loanable funds. This would encourage lenders to (a. raise, b. lower) the interest rates they charge, thereby (a. increasing, b. decreasing) the quantity of loanable funds supplied and (a. increasing, b. decreasing) the quantity of loanable funds demanded, moving the market toward the equilibrium interest rate of ____ %.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
- Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co