Principles Of Economics, Student Value Edition
12th Edition
ISBN: 9780134079288
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: Prentice Hall
expand_more
expand_more
format_list_bulleted
Question
Chapter 26, Problem 5.2P
To determine
Difference between actual physical capacity of existing plants and potential
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
What is the new GDP in the short-run as a result of this shift?
What is the new price level in the short-run as a result of this shift?
What is the price level in the new long-run equilibrium as a result of this shift?
What is GDP in the new long-run equilibrium as a result of the shift?
Based on the data in the table and graph below, identify the equilibrium GDP:
Price Level Real GDP/Output in $ billion Real GDP/Spending in $ billion
80 100 180
90 120 160
100 140 140
110 160 125
120 170 115
130 175 105
140 178 100
Real GDP ($ billion) is charted on the x-axis (range 80-200). Price Level is charted on the y-axis (range: 60-150). The AS curve begins at (80,100) and ends at (179, 140), ascending up left to right. This curve intersects with the AD curve at (140,100). The AD curve begins at point (100, 140) and ends at (180, 80), descending left to right.
Based on the data in the table and graph below, identify the equilibrium GDP:
Price Level
Real GDP/Output in $ billion
Real GDP/Spending in $ billion
80
100
180
90
120
160
100
140
140
110
160
125
120
170
115
130
175
105
140
178
100
Chapter 26 Solutions
Principles Of Economics, Student Value Edition
Knowledge Booster
Similar questions
- Suppose the economy is operating at potential GDP when it experiences an increase in export demand. How might the economy increase production of exports to meet this demand, given that the economy is already at full employment?arrow_forwardImproved methods of inventory control were supposed to reduce fluctuations in inventory stocks. It is clear that these methods have helped reduce the equilibrium inventory/sales ratios in both the manufacturing and trade sectors over the past decade. Yet we find that during the 2001 recession, inventory investment accounted for more than the total decline in real GDP, the first time that had happened since 1949. Explain whether this result is due to a set of odd coincidences, or whether the improved methods of inventory control actually caused bigger fluctuations in inventory investment relative to final sales.arrow_forwardrecognize why economists believe that economic problems such as “shocks” and “sticky prices” are responsible for short-run fluctuations in GDP;arrow_forward
- The graph in Figure I presents the annual GDP growth rate of the United States economy since the first quarter of 2004, while the graphs in Figure II represent three different scenarios of the relationship. between aggregate demand and supply that reflect different situations of economic growth. Answer the following questions in detail. Using the shifts in the aggregate demand curve in each of the three graphs in Figure II, explain the function of aggregate consumption and investment. Explain in detail what is happening in Graph A in Figure II and, after examining the data in the graph in Figure I, identify in what period of time said situation is occurring.arrow_forwardThe Bureau of economic analysis announced today that gross domestic product, the widest measure economic activity, grew in a meager 0.9% annualized rate in the third quarter compared to the first six months of 2018 the US economy in the first 3 quarters of 2019 grew just 1.6%, a pronounced slow down relative to the 3.9% growth in the second half of 2018. Some of this slowdown can be explained by a negative contribution from inventory investment, which contracted 0.9% in the third quarter. There’s plenty to worry about in this report, as it showed us Retail sales Fell for the first time in seven months in September, although overall consumer spending which comprises about 66% of the US GDP activity was up 0 .4%. Capacity utilization also decreased 0.4% in the third quarter to 74.5%.1. Write a phrase from the article that speaks to change in household consumption in the third quarter in 2019. 2. From the information in this article, did household consumption increase or decrease in the…arrow_forwardBased on the data in the table and graph below, identify the equilibrium GDP: Price Level Real GDP/Output in $ billion Real GDP/Spending in $ billion 80 100 180 90 120 160 100 140 140 110 160 125 120 170 115 130 175 105 140 178 100 Group of answer choices $160 billion $100 billion $140 billion $40 billionarrow_forward
- In long-run macroeconomic equilibrium, aggregate quantity demanded equals aggregate quantity supplied equals potential GDP. Select one: True Falsearrow_forwardDiscuss the short run impact (increase, decrease, unchanged, or uncertain) of the decrease in desired consumption on real output, the interest rate, the price level, the unemployment rate, investment, government spending, and net taxes. As part of your discussion do not just state direction, but also give a brief - one sentence - reason for each.arrow_forwardPotential real GDP is defined as: Group of answer choices The quantity of output that the economy can produce when it is above the natural rate of unemployment. The quantity of output that the economy can produce when it is at less than potential employment of its resources. The macro equilibrium The quantity of output that the economy can produce when it is at full employment of its labor and physical capital.arrow_forward
- Question 59 If the economy produces at the point of long-run macro-economic equilibrium then real GDP Question 59 options: a) is less than potential GDP b) any of the above answers could be true c) equals potential GDP d) exceeds potential GDParrow_forwardEconomists forecast future economic conditions by studying variables that tend to fluctuate in advance of the overall economy. The most significant of these variables are known as leading indicators, and they compose the index of leading economic indicators. Which of the following variables are measured as part of this index? Check all that apply. Supplier deliveries The ratio of elderly to nonelderly workers New orders for consumer goods Stock prices The money supply True or False: Businesses and government care only about long-run economic forecasts, because they cannot adapt policy or output to accommodate short-run fluctuations. False True Suppose the most recent data show that the average initial weekly claims for unemployment insurance have recently decreased. This change suggests ____ period in the coming months.arrow_forwardAccording to Budget 2022-23, the Australian government is planning to “Building the skilled workforce and industries that Australia needs, including $2.8 billion for apprentices and $2.2 billion to support Australian industries and universities to develop innovative companies and products.” use appropriate diagrams to explain the impacts the above policy could have on the Australian economy in the short and long run.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
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