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Macroeconomics >custom<
17th Edition
ISBN: 9781323406977
Author: R. Glenn Hubbard, Anthony Obrien
Publisher: PEARSON
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Question
Chapter 13, Problem 13.1RDE
Subpart (a):
To determine
The equilibrium in the AD-AS model.
Sub part (b):
To determine
The equilibrium in the AD-AS model.
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Students have asked these similar questions
An economy is described by the following
equations:
Supply:
Y=F(K,L)=6K^0.6L^0.4
K=405, L=110
Demand:
C=231+0.8(Y-T)
|=1161.0-129r
G=150,T=120
NX=125-490e
r=r*= 5
A. What Is the level of GDP in this economy?
B. How much are household savings?
C. How much Is the government saving?
D. How much is National Saving?
E. How much is investment spending?
F. Net capital outflow is:
G. Equilibrium exchange rate is :
Suppose G drops to 142, Find:
H. National Saving
I. Investment
J. New trade balance
K. New Equilibrium exchange rate
120-
115-
110-
105-
100-
95-
90-
85+
Price level
1.1
S
LAS
D
B
SAS₁
ch
SASO
AD
ADO
1.2
1.3
1.4
1.5
1.6
Real GDP (trillions of 2007 dollars)
1.7
Evaluate the following statement: Even if the prices of a large number of goods and services in the economy increase dramatically, the real GDP for the economy can still fall, but if the prices of a large number of goods and services in the economy decrease dramatically, the real GDP for the economy cannot rise.
Chapter 13 Solutions
Macroeconomics >custom<
Ch. 13 - Prob. 13.1.1RQCh. 13 - Prob. 13.1.2RQCh. 13 - Prob. 13.1.3RQCh. 13 - Prob. 13.1.4RQCh. 13 - Prob. 13.1.5PACh. 13 - Prob. 13.1.6PACh. 13 - Prob. 13.1.7PACh. 13 - Prob. 13.1.8PACh. 13 - Prob. 13.1.9PACh. 13 - Prob. 13.1.10PA
Ch. 13 - Prob. 13.1.11PACh. 13 - Prob. 13.2.1RQCh. 13 - Prob. 13.2.2RQCh. 13 - Prob. 13.2.3RQCh. 13 - Prob. 13.2.4RQCh. 13 - Prob. 13.2.5PACh. 13 - Prob. 13.2.6PACh. 13 - Prob. 13.2.7PACh. 13 - An article in the Economist noted that the...Ch. 13 - Prob. 13.2.9PACh. 13 - Prob. 13.2.10PACh. 13 - Prob. 13.2.11PACh. 13 - Prob. 13.2.12PACh. 13 - Prob. 13.2.13PACh. 13 - Prob. 13.2.14PACh. 13 - Prob. 13.3.1RQCh. 13 - Prob. 13.3.2RQCh. 13 - Prob. 13.3.3RQCh. 13 - Prob. 13.3.4PACh. 13 - Prob. 13.3.5PACh. 13 - Prob. 13.3.6PACh. 13 - Prob. 13.3.7PACh. 13 - Prob. 13.3.8PACh. 13 - Prob. 13.3.9PACh. 13 - Prob. 13.3.10PACh. 13 - Prob. 13.4.1RQCh. 13 - Prob. 13.4.2RQCh. 13 - Prob. 13.4.3RQCh. 13 - Prob. 13.4.4PACh. 13 - Prob. 13.4.5PACh. 13 - Prob. 13.4.6PACh. 13 - Prob. 13.4.7PACh. 13 - Prob. 13.4.8PACh. 13 - Prob. 13.4.9PACh. 13 - Prob. 13.4.10PACh. 13 - Prob. 13.1RDECh. 13 - Prob. 13.2RDECh. 13 - Prob. 13.3RDE
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Similar questions
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- Use the following graph to answer the next question. Price Level AS3 AS₁ 0 Real Domestic Output, GDP Which of the following factors will shift AS₁ to AS2? AS₂ A) A decrease in business subsidies B) An increase in input prices OC) A decrease in business taxes D) An increase in real interest ratesarrow_forwardCan you inform from the graph the movement of the price level in the economy since the beginning of 2021? Explain GDP Were we ever in a recession during the period? How do you know?arrow_forwardFor the following question , please indicate whether current GDP of the United States will be affected and, if so, by how much .In each case, indicate also which component(s) of GDP will be affected and by how much In August 2020 Marie received unemployment benefits for $4,000 and, in May, she received her $1,400 Economic Impact Payment (i.e. coronavirus stimulus check) from the IRS (the tax authority in the US).arrow_forward
- Calculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth and enter the value in trillions of dollars. Components of GDP on the Demand Side (in trillions of dollars) Consumption Investment Government spending Exports Imports Provide your answer below: trillion Total GDP 12.9 3.8 4.2 3.0 4.2 ?arrow_forwardWhat are variables that affect AS (also considered the Supply side of GDP)?arrow_forwardExplain, in detail, how the adjustment to macroeconomic equilibrium occurs when spending is less than production. Be sure to discuss how inventories play a crucial role in the adjustment process. State what happens to GDP and employment during the adjustment process.arrow_forward
- On the following graph, the black line shows potential real GDP and the blue line shows actual real GDP for a hypothetical country from 1990 to 2010. Use the green quadrilateral (triangle symbols) to shade the area between actual and potential real GDP that represents the positive GDP gap. Then use the purple quadrilateral (diamond symbols) to shade the area between actual and potential real GDP that represents the negative GDP gap. GDP (Billions of 2000 dollars) 10 9 8 5 1 0 Actual Real GDP 1900 Potential Real GDP 1004 1008 YEAR 2002 2005 2010 Positive GDP Gap Negative GDP Gap. Which of the following are true of an economy operating below full employment? Check all that apply. The economy is in the peak phase of the business cycle. Actual real GDP is less than potential real GDP. A worker with a college degree is more likely to be unemployed than a worker without one. A teenage worker is more likely to be unemployed than an older worker.arrow_forwardThe imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table shows. Price Level: AD/AS Price Level AD AS 100 800 300 120 700 425 140 600 600 160 500 670 180 400 720 Plot the AD/AS diagram (You don't have to submit the plot, but I recommend doing it as it will help you with this problem). Identify the equilibrium. Blank #1 - Equilibrium Price Level Blank #2 - Equilibrium GDP Blank #3 - Would you expect unemployment in this economy to be relatively high or low? Blank #4 - Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Blank #5 - What is the new equilibrium GDP? Blank #6 - What is the new equilibrium Price Level? How will the shift in AD affect (answer is rise or fall)... Blank #7 - the original output? Blank #8 - the price…arrow_forwardThe imaginary country of Harris Island has the aggregate supply and aggregate demand curves as Table shows. Price Level: AD/AS Price Level AD AS 100 800 300 120 700 425 140 600 600 160 500 670 180 400 720 Plot the AD/AS diagram (You don't have to submit the plot, but I recommend doing it as it will help you with this problem). Identify the equilibrium. Blank #1 - Equilibrium Price Level Blank #2 - Equilibrium GDP Blank #3 - Would you expect unemployment in this economy to be relatively high or low? Blank #4 - Would you expect concern about inflation in this economy to be relatively high or low? Imagine that consumers begin to lose confidence about the state of the economy, and so AD becomes lower by 275 at every price level. Blank #5 - What is the new equilibrium GDP? Blank #6 - What is the new equilibrium Price Level? How will the shift in AD affect (answer is rise or fall)..arrow_forward
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