EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 24, Problem 10DQ
To determine
Macroeconomist’s choice of model.
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d. A decrease in aggregate demand.
e. An increase in aggregate demand that
exceeds an increase in aggrega
supply.
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?
QUESTION 41
A
C
LRAS
LRAS
_LRAS
大大大
40 50
20 30 40 50
20 30
real GDP = Q
20 30
real GDP = Q
real GDP = Q
60
50
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30
20
10
P level
0
10
-AS-
AD
+
40 50
60
50
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10
P level
0-
41. Which of the figures above illustrates an economy in long-run equilibrium?
O a) Figure A
b) Figure B
c) Figure C
o
10
B
AS
AD
60
50
40
30
20
10
P level
0
10
-AS
AD
Chapter 24 Solutions
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- e Page 426 13.1. What is the aggregate demand-aggregate supply model? Fill in the blanks to complete the following passage concerning the history of U.S. recessions. Since the year 1900, the United States has experienced recessions. Since 1970, recessions have occurred. 2 7 22 42 + LO 5 10arrow_forwardRefer to the figure A above. Figure A Figure B Price Price P3 P2 `D, P, D2 Q, Quantity Q, Q2 Q, Quantity Assuming this market is representative of the economy as a whole, a negative demand shock will: 1) increase both the price level and the quantity of output produced. 2) increase output, but leave prices unchanged. O 3) lower the price level, but leave output unchanged. 4) raise the price level, but leave output unchanged.arrow_forwardSuppose that the table presented below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 150.0 $ 400 112.5 300 75.0 200 Instructions: Enter your responses answers rounded to 2 decimal places. a. What is the level of productivity in this economy? b. What is the per-unit cost of production if the price of each input unit is $2? $ C. Assume that the input price increases from $2 to $3 with no accompanying change in productivity. What is the new per-unit cost of production? In what direction would the $1 increase in input price push the economy's aggregate supply curve? (Click to select) v What effect would this shift of aggregate supply have on the price level and the level of real output? O The price level would decrease and real output would increase. O Both the price level and real output would remain the same. O The price level would decrease and real output would remain the same. O The price level would increase…arrow_forward
- Remaining Time: 16 minutes, 20 seconds. Question Completion Status: A Moving to another question will save this response. Question 15 Phillips Curve shows possible combinations of the Unemployment rate inflation rate Wage Rate Income Level bike.jpg * 3 Sc bike 2.jpg 96°F Clear 1 ? Q f2 @ 2 34 # E f4 0 $ 4 and the % R bike 2 LO 5 40 T [Select ALL that apply] 6 G & bike jpg. ❖ 7 Yarrow_forwardPrice Level LAS SAS, SAS, AD SAS, AD, AD, Real Output Refer to the graph. Suppose the economy is at SAS, and AD₂. What is a possible way the economy can return to potential output? What dynamic price level feedback effect could prevent the return to potential output? How would the dynamic price level feedback effect show up in the graph? O A decrease in asset prices in the economy; a decrease in asset prices would further decrease AD; a shift in AD from AD2 to AD3 O A decrease in material costs in the economy; a decrease in material costs would decrease AD; a shift in AD from AD2 to AD1 A decrease in wages in the economy; a decrease in wages would further decrease AD; a shift in AD from AD2 to AD3 A decrease in wages in the economy; a decrease in wages would further decrease AD; a shift in AD from AD2 to AD1arrow_forwardThe previous year had an unemployment rate of 14.1%, nominal GDP of $28.9 trillion, and real GDP of $26.1 trillion. If the unemployment rate changes to 18.6% and overall price levels remain constant, which choice below could be the current year nominal GDP? O $39.3 trillion O $39.2 trillion $39.1 trillion O $28.0 trillionarrow_forward
- : Which of the following statements is true if there is an increase in aggregate demand while the economy is in equilibrium on a positively sloping short-run aggregate supply curve? 3 - O a) Prices rise, national income does not change B) Prices decrease, national income does not change O C) Prices go up and national income goes down. O D) Prices decrease and national income decreases. O TO) Prices rise, national income risesarrow_forwardO 2 5 real interest rate Refer to the figure above. If the economy starts at point 0, how would you illustrate the effect of a positive technological shock that increases returns to investment in high-tech industries, by moving to point: 3 S2 S3 S1 3 2 * 5 D1 D2 Loanable fundsarrow_forwardConsider the data shown in the table. Assume that the economy produces only textbooks. What is the growth rate of real GDP between the two years using last year as the base year? |Textbooks Actual Price Sold Last year This year 5,000 $50 5,250 $55 10% 5% O 2.5% 15%arrow_forward
- Suppose that the actual unemployment rate in a country is 7.7 percent. If the country's frictional unemployment rate is 3.5 percent and its structural unemployment rate is 1.1 percent, what is its cyclical unemployment rate? O 11.7 percent O 3.1 percent O 5.3 percent O 4.1 percent ۵arrow_forward1. LO 2 In the Malthusian model, suppose that the quantity of land increases. Using diagrams, deter- mine what effects this has in the long-run steady state and explain your results.arrow_forward3. The world was growing at a constant growth of 0.00007% rate between 100,000 BC and 1750AD. If birth rates per thousand averaged 35 during this period , what was the average death rate in equilibrium. (approximately) O 31 35 40 8. Which of the following statements is correct? A model is an exact representation of what goes on in the economy. Equilibrium in GDP growth rate is when the growth rate is zero. A model is an economic relationship that is only represented by mathematics. Equilibrium is a self-perpetuating situation that does not change, unless a force for change is introduced from the outside and alters the basic data describing the situation. 9. According to Malthus, which of the following are the not the causes of diminishing average product of labor? Environmental effects of over-cultivation (e.g. increased carbon emissions) Increase in population growth rate More labour is devoted to a fixed quantity of land. The new land brought into cultivation is of inferior quality…arrow_forward
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