EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 37, 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?
29.
Consider the following Macro model:
GDP Y=C+Gl+GP+NX
C=120 +0.80Y,
G.I=80 G.P=60
Tax 100
NX= -20
Yd = Y-T
What is the initial equilibrium level of GDP for the above macro model?
O a. $500
O b. $700
Oc $600
O d. $800
Chapter 37 Solutions
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