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Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383

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BuyFindarrow_forward

Economics (MindTap Course List)

13th Edition
Roger A. Arnold
ISBN: 9781337617383
Textbook Problem

In the short run, what is the impact on the price level and Real GDP of each of the following?

  1. a. An increase in consumption brought about by a decrease in interest rates
  2. b. A decrease in exports brought about by the dollar appreciating
  3. c. A rise in wage rates
  4. d. A beneficial supply shock
  5. e. An adverse supply shock
  6. f. A decline in productivity

 (a)

To determine

Estimate the impact of price level and real GDP when consumption increases and interest rate decreases.

Explanation

If the interest rate decreases in an economy, then the autonomous consumption will increase. It leads to a shift in ...

(b)

To determine

Estimate the impact of price level and real GDP if export decreases when dollar appreciates.

(c)

To determine

Estimate the impact of price level and real GDP when the wage rate increases.

(d)

To determine

Estimate the impact of price level and real GDP when there is a beneficial supply shock.

(e)

To determine

Estimate the impact of price level and real GDP when there is adverse supply shock.

(f)

To determine

Estimate the impact of price level and real GDP when productivity decreases.

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