Macroeconomics, Student Value Edition (7th Edition)
7th Edition
ISBN: 9780134739038
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 12.1.9PA
To determine
Whether a change in
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these 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.
Use the diagram to answer the question
which one of the following will increase the size of the multiplier?
A. an increase in the level of net exports
B. An increase in the marginal propensity to consume
C. an increase in the marginal propensity to save
D. a reduction in the level of government spending
No more than five sentence. Briefly describe/discuss what are the positive impact of the tourism Multiplier effect
Chapter 12 Solutions
Macroeconomics, Student Value Edition (7th Edition)
Ch. 12.A - Prob. 1RQCh. 12.A - Prob. 2RQCh. 12.A - Prob. 3RQCh. 12.A - Prob. 4RQCh. 12 - Prob. 12.1.1RQCh. 12 - Prob. 12.1.2RQCh. 12 - Prob. 12.1.3RQCh. 12 - Prob. 12.1.4PACh. 12 - Prob. 12.1.5PACh. 12 - Prob. 12.1.6PA
Ch. 12 - Prob. 12.1.7PACh. 12 - Prob. 12.1.8PACh. 12 - Prob. 12.1.9PACh. 12 - Prob. 12.2.1RQCh. 12 - Prob. 12.2.2RQCh. 12 - Prob. 12.2.3RQCh. 12 - Prob. 12.2.4RQCh. 12 - Prob. 12.2.5RQCh. 12 - Prob. 12.2.6PACh. 12 - Prob. 12.2.7PACh. 12 - Prob. 12.2.8PACh. 12 - Prob. 12.2.9PACh. 12 - Prob. 12.2.10PACh. 12 - Prob. 12.2.11PACh. 12 - Prob. 12.2.12PACh. 12 - Prob. 12.2.13PACh. 12 - Prob. 12.2.14PACh. 12 - Prob. 12.2.15PACh. 12 - Prob. 12.3.1RQCh. 12 - Prob. 12.3.2RQCh. 12 - Prob. 12.3.3RQCh. 12 - Prob. 12.3.4RQCh. 12 - Prob. 12.3.5RQCh. 12 - Prob. 12.3.6PACh. 12 - Prob. 12.3.7PACh. 12 - Prob. 12.3.8PACh. 12 - Prob. 12.3.9PACh. 12 - Prob. 12.3.10PACh. 12 - Prob. 12.3.12PACh. 12 - Prob. 12.4.1RQCh. 12 - Prob. 12.4.2RQCh. 12 - Prob. 12.4.3RQCh. 12 - Prob. 12.4.4PACh. 12 - Prob. 12.4.5PACh. 12 - Prob. 12.4.6PACh. 12 - Prob. 12.4.7PACh. 12 - Prob. 12.4.8PACh. 12 - Prob. 12.4.9PACh. 12 - Prob. 12.4.10PACh. 12 - Prob. 12.4.11PACh. 12 - Prob. 12.4.12PACh. 12 - Prob. 12.4.13PACh. 12 - Prob. 12.4.14PACh. 12 - Prob. 12.5.1RQCh. 12 - Prob. 12.5.2RQCh. 12 - Prob. 12.5.3RQCh. 12 - Prob. 12.5.4PACh. 12 - Prob. 12.5.5PACh. 12 - Prob. 12.5.6PACh. 12 - Prob. 12.1RDECh. 12 - Prob. 12.2CTECh. 12 - Prob. 12.3CTE
Knowledge Booster
Similar questions
- Locate a news article that describes an event that would cause a shift in the Aggregate Demand (Aggregate Expenditure). Describe if the event would cause an “upward” or “downward” shift in the Aggregate Demand curve and why. Briefly explain how this then fits within the Consumption Function.arrow_forwardim having a little toruble with the following question and answer: The Commerce Department reported that retail sales increased 1.3 percent in June. Net exports were up 0.8 percent in the first quarter and inventories held by businesses rose by 0.3 percent in June. Total sales by businesses rose 0.3 percent. Source: Commerce Department, 2013 Does the statement that total sales by businesses were up 0.3 percent mean that GDP increased by 0.3 percent? The statement that total sales by businesses were up 0.3 percent means that GDP ______ because ______. A. did not change by 0.3 percent; GDP measures production of all final goods and services and "total sales by businesses" includes final and intermediate goods and services B. increased by 0.3 percent; GDP is a record of the value of all production C. decreased by 0.3 percent; "total sales by businesses" are sales of intermediate goods and services D. increased by less than 0.3 percent;…arrow_forwardWhat is the difference between aggregate expenditure and aggregate demand? Why is the aggregate demand curve downward sloping while the aggregate expenditure line is upward sloping?arrow_forward
- Draw a diagram and illustrate the effects of the following on the net exports function for the United States: a. The French government imposes restrictions on French imports of U.S. goods. b. The U.S. national income rises. c. Foreign income falls. d. The dollar depreciates on the foreign exchange market.arrow_forwardAccording to Keynes, when the price level rises, it causes the interest rate to do what? It causes the level of business spending to do what? a. It causes a decrease in the interest rate, as people adjust to higher prices and purchase less; business spending decreases as well. b. It causes a decrease in the interest rate, as people adjust to higher prices and purchase less; business spending goes up. c. It causes an increase in the interest rate, due to greater consumer demand for money to spend; business spending goes up as well. d. It causes an increase in the interest rate, due to a greater consumer demand for money to spend; business spending decreases.arrow_forwardExplain how an increase in the price level changes interest rates. How does this change in interest rates lead to changes in investment and net exports?arrow_forward
- Consider the following model of an economy with no international trade, and in which the price level is fixed: C = 40 + (8/9)∙DI I = 30 G = 30 Taxes = (1/8)∙GDP where C is consumption demand, DI is disposable income, I is planned investment, G is government purchases, and all whole numbers are in billions of dollars. Determine the equilibrium level of production (GDP) in this economy (show your work), and draw this equilibrium situation on a graph. Use the multiplier to determine the change in equilibrium GDP that would result from an exogenous 16 billion dollar increase of government purchases. Then determine…arrow_forwardU.S. business inventories increase Business inventories in the United States rose 0.4% in July after no change in the prior month. An increase in inventories adds to gross domestic product while a decrease subtracts from it. Source: U.S. Department of Commerce, September 13, 2019 Explain why an increase in inventories adds to gross domestic product but why it matters whether an increase in inventories is planned or unplanned. A planned increase in inventories _______. A. decreases investment, which decreases equilibrium expenditure and real GDP B. increases investment, which increases equilibrium expenditure and real GDP C. shifts the AE curve upward, so firms decrease production and real GDP decreases to reach equilibrium expenditure D. shifts the AE curve downward, so firms decrease production and real GDP decreases E. increases consumption expenditure, which increases equilibrium expenditure and real GDP An unplanned increase…arrow_forwardExplain how each of the following will affect the consumption and saving schedules (as they relate to GDP) or the investment schedule, other things equal: A large increase in the value of real estate, including private houses A decline in real estate rate A sharp, sustained decline in stock prices. An increase in the rate of population growth. The development of a cheaper method of manufacturing computer chips. A sizable increase in the retirement age for collecting Social Security benefits. An increase in the Federal personal income tax.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Economics (MindTap Course List)EconomicsISBN:9781337617383Author:Roger A. ArnoldPublisher:Cengage Learning
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning