EBK MACROECONOMICS (FOURTH EDITION)
4th Edition
ISBN: 9780393616125
Author: Jones
Publisher: YUZU
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Chapter 11, Problem 6E
To determine
The effect of a large earthquake on the short-run output.
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EBK MACROECONOMICS (FOURTH EDITION)
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- Suppose England's economy is in long-run equilibrium. As a result of the coronavirus, the British government orders all non-essential businesses to close and issue “shutter in” and other “stay at home” directives requiring its citizens and residents not to leave their residences absent emergencies and/or to purchase food and groceries from markets (that is, people cannot, for example, go to restaurants, movies or sporting events and the like.) If so, then we would predict that in the short-run England's A. real GDP will fall and the price level might rise, fall, or stay the same. B. real GDP will rise and the price level might rise, fall, or stay the same. C. the price level will rise, and real GDP might rise, fall, or stay the same. D. the price level will fall, and real GDP might rise, fall, or stay the samearrow_forwardStock market crashes are often followed by economic downturns. Using a 450 -line diagram, explain how a stock market crash has the potential to lead to a recession in an economyarrow_forwardUse the IS curve to explains what happens to the short-run economy when consumers become pessimistic about the state of the economy and future GDP growth.arrow_forward
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