Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter D, Problem 17RQ
Exercise D17
Will an economy with a high multiplier be more stable or less stable than an economy with a low multiplier in response to changes in the economy or in government policy?
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"THE EFFECT OF COVID 19 IN THE ECONOMY OF THE PHILIPPINES"
Can MPC be negative or greater than 1? Why or why not?
Similar to previous health pandemics, at the outset of the COVID-19 pandemic the demand for protective goods such as masks, gloves and sanitisers increased markedly around the globe resulting in retailers making super profits. In addition, the sales of personal protective equipment (PPE), cleaning and fumigation contractors surged up as their demand increased. According to data released by Monfils LLC, an international research firm based in the Italy, face mask sales grew by a year-on-year increase of 400% in April 2020. However, in December of 2020, the price of face masks fully retraced back to its pre-COVID-19 level.1.1 With the aid of diagrams, evaluate the change in the market structure between March 2020 and December 2020 as well as other factors that could have influenced the price increase of face masks in March 2020.1.2 Critically discuss how price elasticity of demand of face masks was affected, including its impact on revenue at the outset of the pandemic relative to later…
Chapter D Solutions
Principles of Economics 2e
Ch. D - Exercise D6 What is on the axes of an...Ch. D - Exercise D7 What does the 45-degree line show?Ch. D - Exercise D8 What determines the slope of a...Ch. D - Exercise D9 What is the marginal propensity to...Ch. D - Exercise D10 Why are the investment function, the...Ch. D - Exercise D11 Why does the import function slope...Ch. D - Exercise D12 What are the components on which the...Ch. D - Exercise D13 Is the equilibrium in a Keynesian...Ch. D - Exercise D14 What is an inflationary gap? A...Ch. D - Exercise D15 What is the multiplier effect?
Ch. D - Exercise D16 Why are savings, taxes, and imports...Ch. D - Exercise D17 Will an economy with a high...Ch. D - Exercise D18 How do economists use the multiplier?Ch. D - Exercise D19 What does it mean when the aggregate...Ch. D - Exercise D20 Which model, the AD/AS or the AE...Ch. D - Exercise D21 What are some reasons that the...Ch. D - Exercise D22 What should the government do to...Ch. D - Exercise D23 Two counties are in a recession....Ch. D - Exercise D24 Compare two policies: a tax cut on...Ch. D - Exercise D25 What role does government play in...Ch. D - Exercise D26 If there is a recessionary gap of 100...Ch. D - Exercise D27 What other changes in the economy can...
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Similar questions
- Exercise D27 What other changes in the economy can be evaluated using the multiplier?arrow_forwardExercise D22 What should the government do to relieve inflationary pressures if the aggregate expenditure is greater than potential GDP?arrow_forwardExercise D10 Why are the investment function, the government spending function, and the export function all drawn as flat lines?arrow_forward
- Exercise D15 What is the multiplier effect?arrow_forwardExercise D21 What are some reasons that the economy might be in a recession, and what is the appropriate government action to alleviate the recession?arrow_forwardExercise B3 Why are indifference curves sleep on the left and flatter on the right?arrow_forward
- Exercise D6 What is on the axes of an expenditure-output diagram?arrow_forwardExercise D7 What does the 45-degree line show?arrow_forwardExercise D19 What does it mean when the aggregate expenditure line crosses the 45-degrss line? In other words, how would you explain the intersection in words?arrow_forward
- Exercise B8 Does the income effect involve a change in income? Explain.arrow_forwardExercise D12 What are the components on which the aggregate expenditure function is based?arrow_forwardExercise D20 Which model, the AD/AS or the AE model better explains the relationship between rising price levels and GDP? Why?arrow_forward
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