Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 9, Problem 7WNG
To determine
Explain the relationship between recessionary gap, inflationary gap or long run equilibrium.
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Which of the following is true about real GDP?
A.
It is always equal to nominal GDP
B.
It increases only when price increases
C.
It increases only when output increases
D.
It increases when population increases
Which of the following will NOT lead to an increase in real GDP?
A.
On average, people in a country decide to increase the number of hours they work by 5%.
B.
Spending on homeland security increases in response to a terrorist attack.
C.
The price level and nominal GDP increase by 10%.
D.
Due to lower interest rates by the Fed investors increase their investmen
Consumption is an important element of aggregate demand because it
A) is the most volatile component of GDP B) accounts for roughly 70 percent of GDP
C) is very interest sensitive
D) is greatly affected by stock market activity E) all of these
Chapter 9 Solutions
Macroeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
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Similar questions
- When real GDP declines during a recession, what typically happens to consumption, investment, and the unemployment rate?arrow_forwardWhich of the following will NOT lead to an increase in real GDP? A. On average, people in a country decide to increase the number of hours they work by 5%. B. Spending on homeland security increases in response to a terrorist attack. C. The price level and nominal GDP increase by 10%. D. Due to lower interest rates by the Fed investors increase their investmentsarrow_forwardTrue or false GDP is a macroeconomic concept.arrow_forward
- If Full employment GDP is greater than equilibrium GDP, the economy is facing A) Recession B) Inflation C) Stagflation D) None of the Abovearrow_forwardThe difference between nominal GDP and real GDP is that nominal GDP Group of answer choices measures the level of output and real GDP measures the price level. measures the price level and real GDP measures the level of output. measures the level of output in constant prices, while real GDP includes price changes. measures the level of output including price changes, while real GDP holds prices constant.arrow_forwardWhich of the following is true about the real GDP?a. It is equal to nominal GDP multiplied by the GDP deflator. b. It measures aggregate output using current prices. c. It measures aggregate output using constant prices.d. It is equal to the GDP deflator divided by nominal GDP.e. It is greater than nominal GDP when the GDP deflator is greater than 100.arrow_forward
- If Full employment GDP is greater than equilibrium GDP, the economy is facingarrow_forward(Nominal GDP) Which of the following is a necessary condition —something that must occur—for nominal GDP to rise? Explain your answers. Actual production must increase. The price level must increase. Real GDP must increase. Both the price level and actual production must increase. Either the price level or real GDP must increasearrow_forwardResearch on the effects of recessions on the real level of GDP shows that recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase. recessions cause large, permanent reductions in the real level of GDP. recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary. recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.arrow_forward
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