MACROECONOMICS (LL)
21st Edition
ISBN: 9781260186949
Author: McConnell
Publisher: MCG
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Question
Chapter 11, Problem 10P
Subpart (a):
To determine
Equilibrium GDP in relation to AE model.
Subpart (b):
To determine
Equilibrium GDP in relation to AE model.
Subpart (c):
To determine
Equilibrium GDP in relation to AE model.
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In the aggregate expenditure model, what is NOT necessarily a characteristic of an economy in equilibrium?(a) The aggregate expenditure line is equal to the 45-degree line.(b) Aggregate expenditures are equal to income.(c) Investment equals saving.(d) Nothing is pressuring the economy to move to a higher or lower level of output
based on macroeconomic theory, one of the following four answers is a correct description of the concept, “expenditure multiplier”. Which one?
A/ It is the idea that decreasing national income affects the equilibrium level of GDP by the same amount of that decrease in income.
B/ It is the concept that increasing national income affects the equilibrium level of GDP on par with the amount of increased income.
C/ The expenditure multiplier is the idea that a given change in spending leads to an equal change in the equilibrium level of GDP.
D/ It is the concept that an increase in spending causes a more than proportionate change in GDP.
Macroeconomic equilibrium occurs when aggregate expenditure = GDP. aggregate expenditure = C+ I + G + net transfers. aggregate income = planned inventories. aggregate income = planned inventories. 88. If economists forecast a decrease in aggregate expenditure, which of the following is likely to occur? GDP will rise. GDP will fall. Wages will rise. Inventories will fall.
Chapter 11 Solutions
MACROECONOMICS (LL)
Ch. 11.2 - Prob. 1QQCh. 11.2 - Prob. 2QQCh. 11.2 - Prob. 3QQCh. 11.2 - Prob. 4QQCh. 11.7 - Prob. 1QQCh. 11.7 - Prob. 2QQCh. 11.7 - Prob. 3QQCh. 11.7 - Prob. 4QQCh. 11 - Prob. 1DQCh. 11 - Prob. 2DQ
Ch. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - Prob. 5RQCh. 11 - Prob. 6RQCh. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 1PCh. 11 - Prob. 2PCh. 11 - Prob. 3PCh. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - Prob. 6PCh. 11 - Prob. 7PCh. 11 - Prob. 8PCh. 11 - Prob. 9PCh. 11 - Prob. 10P
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Similar questions
- Which of the following correctly describes how a decrease in the price level affects consumption spending? Select one: a. A decrease in the price level raises real wealth, which causes consumption to increase. b. A decrease in the price level decreases the amount of money a household needs to buy goods and so raises the interest rate, which causes consumption to increase. c. A decrease in the price level increases the amount of money a household needs to buy goods and so raises the interest rate, which causes consumption to increase. d. A decrease in the price level lowers real wealth, which causes consumption to decrease.arrow_forwardIn the below table, C is consumption expenditure, Iis investment, G is government expenditure, and NX is the net exports. All entries are in million dollars. (SHOW THE STEPS OF CALCULATIONS) a) What is the equilibrium level of real GDP? b) What is the slope of the aggregate expenditure function? c) What is the unplanned inventory change when GDP is equal to $2200 million? d) How much is the level of savings when income is $2300 million?arrow_forward
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