1. If equilibrium national income is higher than the potential income at full- employment, there will be in the economy a.deflationary gap b.recessionary gap c.inflationary gap d. inequality gap
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- the effect of gorvt spending in national income euation is to .... options : increase govt expenditure incraese national income incraese govt debt make is citizen crazy7. A large GDP gap implies A. an excess of imports over exports. B. a low rate of unemployment C. a high rate of unemployment.A4 Government wants to boost the economy after the pandemic crisis. They decide to reduce the income tax on wage earners from 10% to 8%. How does a decrease in income tax affect the labor market and potential GDP?
- a. What is the equilibrium rate of real GDP? $ __ billion b. If full-employment real GDP is $800 billion, what problem does this economy have? multiple choice This economy has a recessionary gap. This economy has an inflationary gap. This economy does not have a problem. c. How large is the real GDP gap? $ __ billion1. A recessionary gap is the result of the: a.actual level of output falling below the full-employment level of output. b.full-employment level of output falling below the actual level of output. c.full-employment level of output falling below the actual level of consumption.Match the term to the definition Occurs when equilibrium GDP is greater than full employment GDP Occurs when equilibrium is less than full employment GDP A. Recessionary GAP B. Inflationary Gap
- Potential GDP 450 C+l+G+X-IM) F T 4,000 5,000 6,000 Real GDP (billions of dollars per year) In Figure 11-1, the slope of the expenditures schedule is 0.75, and the govemment wishes to achieve full employment. It should cut spending by 1,000. increase spending by 250. cut taxes by 1,000. cut taxes by 250. increase spending by 1,000. Real ExpenditureAn economy is at full employment. Which of the following events can create a recessionary gap? A.An increase in foreign income. B.An increase in government spending. C.An increase in taxes. D.A decrease in nominal wages.What are the main components of measuring GDP with what is demanded?
- Exercise D24 Compare two policies: a tax cut on income or an increase in government spending on roads and bridges. What are both the short-term and long—term impacts of such policies on the economy?OMAN'S ECONOMIC PROFILE The Sultanate of Oman has had extraordinary economic development since 2004, primarily due to the exploitation of its oil reserves. However, growth rates declined in 2019 to 0.5% as oil production remains capped by the OPEC production cut agreement, and also because of the slowdown in household consumption. As percentage of GDP, net exports account to roughly 12%. Oman has a relatively healthy economic and financial situation. Its government debt (estimated at 38.9% in 2019) is small compared to its gold and foreign currency reserves, although is expected to grow in the coming years. As of 2019, government expenditures as a part of GDP accounts to 24.9% (The World Bank, 2021). Oman Private Consumption contribution to GDP has an average share of 40.6 % (CEIC, 2020). The industrial sector accounts for 46.7% of GDP and employs 36.1% of the workforce (World Bank). Its share has increased considerably in the last two decades (employment in industries was as low as…21) The shortfall between actual real GDP and potential GDP a. decreases as the unemployment rate rises. b. increases as the unemployment rate rises. c. increases as the employment rate rises. d. decreases as the labor force inereases.
