Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 22, Problem 3.3P
To determine
Possibilities in the short or long run growth.
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Check out a sample textbook solutionStudents have asked these similar questions
In the long run, what happens to consumption in the economy when people are saving less?
a) remains the same
b) cannot tell from the graph
c) decreases
d) increases
The government of Prime Minister Shinzo Abe said it would offer some $15 billion in financing for businesses hit by the novel coronavirus and spend about $4 billion directly to prop up the economy.“As the top priority for the time being, we have to put all our effort into keeping businesses alive,” Mr. Abe said.Still, in a $5 trillion economy, the measures may not be big enough to dig the country out of a big hole. SMBC Nikko Securities economist Junichi Makino said he expected the Japanese economy to shrink at an annualized pace of 5.8% in the January-to-March period following a 7.1% contraction in the last quarter of 2019.Japan is set to offer emergency no-interest loans of about $1,900 to newly jobless people and others in trouble, and the borrowers may not have to pay the money back if they can’t find work. Businesses at risk from the virus can access financing or loan guarantees from the government
QUESTIONS:
1. How would the financing plan designed to supports businesses impact the…
Suppose the government undertakes a large spending program to build community colleges and to make higher education free for many low-income families. How would you expect the program to affect output in the short run? Assuming that the program succeeds in increasing the skills of some workers, how would you expect it to output in the long run?
Chapter 22 Solutions
Principles of Economics (12th Edition)
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Similar questions
- For each of the following, please explain each step and show it in the graph! a. Assume an economy is at full employment, but then consumer spending rises. What will most likely happen in the short run?arrow_forwardExplain how an increase in government spending (or, equivalently, a cut in taxes) is unlikely to lead to any increase in output neither in the short nor in the long runarrow_forwardWhat is the difference between financial investment and economic investment? 1) There is no difference between the two. 2) Financial investment refers to the purchase of financial assets only; economic investment refers to the purchase of any new or used capital goods. 3) Economic investment is adjusted for inflation; financial investment is not. 4) Financial investment refers to the purchase of assets for financial gain; economic investment refers to the purchase of newly created capital goods.arrow_forward
- The accompanying graph illustrates an economy in long-run equilibrium which is denoted by point ELR. Suppose a new technology is discovered which increases productivity. In the graph, demonstrate how the economy moves to its new long-run equilibrium by shifting the appropriate curves and placing point ELR at the new long-run equilibrium. In the long run, the aggregate price level increases. decreases. does not change. and real GDP (aggregate output) increases. decreases. does not change.arrow_forwardThe table provided shows the amount consumers of a country spend on five items and the percentage change in the price of the products in the same year. What was the overall rise in the weighted cost of living index? (Pick either a, b, c, or d) a)15% b)16% c)17% d)0%arrow_forwardThe following abstract appeared in gultnews.com on January 14th, 2019. "The UAE is forecast to achieve an annual average real GDP growth rate of 3.89% between 2019 and 2023, supported by an increase in investment Nows and private consumption A Would the nominal rate be less, the same or more than 3.8% Explain your answer discussing the difference between nominal GDP and8 GDP is used up by FOUR ultimate users Who are they? C Discuss whether the method that you use to calculate GDP influence the final resultarrow_forward
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