Describe three types of short-run macroeconomic equilibrium. A macroeconomic equilibrium in which real GDP exceeds potential GDP is equilibrium. And one in which real GDP is less than potential GDP is A. an above full-employment; a recessionary B. a below full-employment; an inflationary C. an above full-employment; a below full-employment D. a below full-employment; an above full-employment equilibrium. The graph shows an economy's long-run aggregate supply curve. The economy is at a full-employment equilibrium. Draw an aggregate demand curve and a short-run aggregate supply curve. Label them. Draw a point at the short-run equilibrium. 150 140- 130- 120- 110 100- 90+ Price level (GDP deflator, 2009=100) LAS 15.5 17.5 18.5 16.5 19.5 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question. 20.5

Describe three types of short-run macroeconomic equilibrium. A macroeconomic equilibrium in which real GDP exceeds potential GDP is equilibrium. And one in which real GDP is less than potential GDP is A. an above full-employment; a recessionary B. a below full-employment; an inflationary C. an above full-employment; a below full-employment D. a below full-employment; an above full-employment equilibrium. The graph shows an economy's long-run aggregate supply curve. The economy is at a full-employment equilibrium. Draw an aggregate demand curve and a short-run aggregate supply curve. Label them. Draw a point at the short-run equilibrium. 150 140- 130- 120- 110 100- 90+ Price level (GDP deflator, 2009=100) LAS 15.5 17.5 18.5 16.5 19.5 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question. 20.5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Price level (GDP price index, 2012 140 130 120 110 105 100 90 90 19 Potential GDP ADO 21 20 AS 22 Real GDP (trillions of 2012 dollars) The figure above shows a nation's aggregate demand curve, aggregate supply curve, and potential GDP. In the figure above, the can change expenditure by gap is one trillion dollars. To close the gap, the government one trillion dollars. recessionary; exactly inflationary; more than recessionary; less than recessionary; more than
The French economist Jean-Baptiste Say trans- formed the equality of total output and total spending into a law that can be expressed asa. unemployment is not possible in the short run.b. demand and supply are never equal.c. supply creates its own demand.d. demand creates its own supply.
Instructions: Enter your answers as a whole number. B. How much does aggregate demand need to change to restore the economy to its long-run equilibrium? $ billion b. If the MPC is 0.75, how much does government purchases need to change to shift aggregate demand by the amount you found in parta? $ billion Suppose instead that the MPC is 0.6. C. How much does aggregate demand and government purchases need to change to restore the economy to its long-run equilibrium? Aggregate demand needs to change by $ billion and government purchases need to change by $1 Price Level 160 140 120 100 80 60 40 20 0 LRAS (240,90) AD₁ billion. Real GDP (billions of dollars) AS AD 80 160 240 320 400 480 560 640 720 800
Consider the following diagram, in which the current short-run equilibrium is at point A. At point A, the economy has If the marginal propensity to save equals 0.20, calculate the change in government spending that could eliminate the gap. S trillion. (Round your answer to two decimal places.) CO Price Level 40 120 115 111 0 LRAS 22 22.5 23 Real GDP per Year ($ trillion) SRA AD
Refer to the following figure 1. For this economy, if the actual price level exceeds theexpected price level, how much output will the economyproduce in the short-run? A)$17 trillionB)$17.2 trillionC)$16.7 trillionD) Both A and C.2. Given the situation in part (a), this economy wouldexperience A) a recessionary gap of $0.3 trillionB) an expansionary gap of $0.2 trillionC) neither a recessionary gap nor an expansionary gap.D) an expansionary gap of $17.2 trillion. 3. Given the situation in part (a), in this economy (circlethe letter representing the right answer below)A) the actual rate of unemployment would be less than thenatural rate of unemployment.B) the actual rate of unemployment would be above the naturalrate of unemployment.C) the actual rate of unemployment would be equal to thenatural rate of unemployment.D)none of the above.4. In this economy, given the situation in part (a), in thelong-run (circle the letter representing the right answerbelow)A) the nominal wage…
What type of output gap occurs when the economy is below full employment? The economy is below full employment. Draw the aggregate demand curve. Label it AD. Draw a point at the equilibrium. C 140- 130- Price level (GDP price index, 2012-100) 120- 110- 100- 90- 90 80- 18.0 Potential GDP AS ☑ 18.5 19.0 19.5 20.0 20.5 21.0 21.5 22.0 Real GDP (trillions of 2012 dollars) >>> Draw only the objects specified in the question.
At the macroeconomic equilibrium, the economy has _______ gap, so to return to full employment _________. A. an inflationary; the money wage rate rises and aggregate supply increases B. a recessionary; the money wage rate falls and aggregate supply increases C. an inflationary; the money wage rate rises and aggregate supply decreases D. a recessionary; the money wage rate rises and aggregate supply decreases
Figure: Policy Alternatives Panel (a) Price level P₁ P₂ P₁ LRAS SRAS, AD₁ Y₁ YpY₂ Real GDP SRAS₂ A) an inflationary gap. B) a recessionary gap. C) no gap. D) long-run equilibrium. m Yes Predictions On Styles Ty Price level Page 4 P₁ Droon P₂ Voice Panel (b) LRAS * SRAS₁ Y₁ Yp Y₂ 11. (Figure: Policy Alternatives) In Panel (a), suppose that the initial equilibrium is at real GDP level Y₁ and price level P₂. At real GDP level Y₁ there is: AD₁ Real GDP 19 AD₂ 100%
a. What are the short-run equilibrium real GDP and price level in 2019?b. What is the long-run equilibrium real GDP?c. Is the short-run macroeconomic equilibrium a full-employment equilibrium, belowfull-employment equilibrium, or above full-employment equilibrium?d. In transition to the long run, how would the wages in this economy change?e. Following from d, explain how would the short run supply curve move to its long runposition, as the changes in the nominal wages take effect.f. What will the long run price level be?
In 2017, in proposing a $1 trillion increase in government spending on infrastructure, President Trump argued that the spending would increase total employment in the United States. Source: Ted Mann and Michael C. Bender, "President Trump to Launch Push for Infrastructure Investment," Wall Street Journal, June 4, 2017. In the short run, increases in federal spending will increase real GDP and employment if A. the economy is producing at less than its potential output and has some cyclical unemployment. B. wages and prices do not change. C. the economy is experiencing inflation. D. the price level remains stable. The federal government would not want to increase its spending, even if the result were to increase real GDP and employment in the short run, if A. tax receipts are falling. B. productivity is falling. C. it would result in deflation. D. it would lead to a greater federal deficit and an increase in the national debt. President Trump was assuming that in 2017, the economy was A.…
If the price level and the money wage rate rise by the same percentage, what happens to the quantity of real GDP supplied? How does the economy move? If the price level and the money wage rate rise by the same percentage, the quantity of real GDP supplied _______ and there is a movement up along the _______. A. does not change; potential GDP line B. increases; aggregate supply curve C. decreases; potential GDP line D. does not change; aggregate supply curve Thanks!