Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Chapter 19, Problem 4DQ
To determine
Real business cycle and more traditional spending.
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Figure 13-4
Price
level
112
110
8%
O 12%
10%
LRAS
O 9.1%
LAAS SRAS,
11.0 118 12.1
AD,
SRAS
Refer to Figure 13-4. In the figure above, LRAS₁ and SRAS1 denote LRAS and SRAS in year 1, while
LRAS2 and SRAS2 denote LRAS and SRAS in year 2. Given the economy is at point A in year 1, what
is the growth rate in potential GDP in year 2?
AD₂
Real GDP
(trillions of dollars)
4. LO 4 In Figure 3.11, after the 1981-1982 reces-
sion, does the price level appear to be procyclical,
countercylical, or acyclical? Why is this important?
4. Below is a list of domestic output and national income figures for
a certain year. All figures are in billions. The questions that follow
ask you to determine the major national income measures by both
the expenditures and income approaches. The results you obtain
with the different methods should be the same. LO7.4
Personal consumption expenditures
$245
7.
Net foreign factor income
4
Transfer payments
12
Rents
14
Consumption of fixed capital (depreciation)
27
Statistical discrepancy
8.
Social Security contributions
20
Interest
13
Proprietors' income
33
Net exports
11
Dividends
16
Compensation of employees
223
Taxes on production and imports
18
Undistributed corporate profits
21
Personal taxes
26
19
Corporate income taxes
56
Corporate profits
72
Government purchases
33
Net private domestic investment
20
Personal saving
a. Using the above data, determine GDP by both the expenditures
approach and the income approach. Then determine NDP.
b. Now determine NI in two ways: first, by…
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