ECON MACRO
ECON MACRO
5th Edition
ISBN: 9781337000529
Author: William A. McEachern
Publisher: Cengage Learning
Question
Chapter 10, Problem 2.3P

Sub-part

A

To determine

The real GDP and actual price level when the actual price level exceeds the expected price level.

Concept Introduction:

Expansionary Gap: Expansionary Gap is the gap between actual output and potential output under full employment situation, when actual output is more than potential output.

Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.

Sub-part

B

To determine

The expansionary and recessionary Gap when the actual price level exceeds the expected price level.

Concept Introduction:

Expansionary Gap: Expansionary Gap is the gap between actual output and potential output under full employment situation, when actual output is more than potential output.

Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.

Sub-part

C

To determine

The real GDP and actual price level when the actual price level is lower than the expected price level.

Concept Introduction:

Expansionary Gap: Expansionary Gap is the gap between actual output and potential output under full employment situation, when actual output is more than potential output.

Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.

Sub-part

D

To determine

The expansionary and recessionary Gap when the actual price level is lower than the expected price level.

Concept Introduction:

Expansionary Gap: Expansionary Gap is the gap between actual output and potential output under full employment situation, when actual output is more than potential output.

Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.

Sub-part

E

To determine

The real GDP and actual price level when the actual price level equals the expected price level.

Concept Introduction:

Expansionary Gap: Expansionary Gap is the gap between actual output and potential output under full employment situation, when actual output is more than potential output.

Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.

Sub-part

F

To determine

The expansionary and recessionary Gap when the actual price level is equal to the expected price level.

Concept Introduction:

Expansionary Gap: Expansionary Gap is the gap between actual output and potential output under full employment situation, when actual output is more than potential output.

Recessionary Gap: Recessionary Gap is the gap between actual output and potential output under full employment situation, when actual output is less than potential output.

Blurred answer
Students have asked these similar questions
Question 3 Macroeconomics is the study of the small aspects of large entities. the overall price level and the levels of unemployment and output. the interaction of consumers and producers in markets for particular goods and services. anything large. individuals in an economy.
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.
5 An economic recession means that _______. a. GDP is critically high b. Employment is increasing c. Output and employment is down d. Output is increasing
Knowledge Booster
Similar questions
  • Hydraulic fracturing (tracking) has the potential to significantly increase the amount of natural gas produced in the United States. If a large percentage of factories and utility companies use natural gas, what will happen to output, the price level, and employment as tracking becomes more widely used?
    QUESTION 60 Aggregate supply is defined as   a. the relationship between the expenditures schedule and the leakages schedule.   b. the relationship between the price level and the quantity of real GDP supplied.   c. how much the economy can produce at zero unemployment.   d. an amount of output the economy will produce 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…
  • 1- Examine the fundamental causes of a nation’s business cycle fluctuations. Also, examine the relationship between total spending by government and consumers in a nation and the location of the countries’ GDP on the business cycle. 2-Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.  Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses. 3- Use the Aggregate supply and Aggregate Demand Model below to answer the questions that follow. Aggregate Supply and Aggregate Demand Model   (i) Examine the influence of government expenditure on investment in a nation. Use Jot Inc. Ltd  a multinational construction company in which you are the Chief Exec of the firm that that is highly diversified and…
    On a microeconomic demand curve, a decrease in price causes an increase in quantity demanded because the product in question is now relatively less expensive than substitute products. Explain why aggregate demand does not increase for the same reason in response to a decrease in the aggregate price level. In other words, what causes total spending to increase if it is not because goods are now cheaper?
    3- The lowest part of a recession is referred to as its _________. a. Depression b. Boom c. Peak d. Trough
    • SEE MORE QUESTIONS
    Recommended textbooks for you
  • ECON MACRO
    Economics
    ISBN:9781337000529
    Author:William A. McEachern
    Publisher:Cengage Learning
    Principles of Economics 2e
    Economics
    ISBN:9781947172364
    Author:Steven A. Greenlaw; David Shapiro
    Publisher:OpenStax
  • ECON MACRO
    Economics
    ISBN:9781337000529
    Author:William A. McEachern
    Publisher:Cengage Learning
    Principles of Economics 2e
    Economics
    ISBN:9781947172364
    Author:Steven A. Greenlaw; David Shapiro
    Publisher:OpenStax