Following a demand-side recession, what happens to full employment GDP (C+I+G) after a few recessions and over-expansion? Why is this composition problematic for the long run?
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Following a demand-side recession, what happens to full employment
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- In what year and quarter did U.S. real GDP first exceed its pre-recession level?In our modern economy, the adjustment process necessary to eliminate a recessionary gap is very rapid. True or FalseThe government of Australia has embarked on various policies in order to reduce the severity of COVID 19 on the economy. Has COVID 19 caused economic expansion or a recession? Explain your answer using at least two economic effects on the economy of Australia
- If Full employment GDP is greater than equilibrium GDP, the economy is facing A) Recession B) Inflation C) Stagflation D) None of the AboveWhich of the following economic environments would most likely be associated with a recession? Unemployment falling to 30-year low Unemployment increasing from 5% to 9% during the year New businesses opening in record numbers while new housing starts reach a 10-year high GDP growing at an annual rate of 4.2%recognize why economists believe that economic problems such as “shocks” and “sticky prices” are responsible for short-run fluctuations in GDP;
- 1. Key facts about economic fluctuations The following graph approximates business cycles in the United States from the first quarter of 1955 to the third quarter of 1959. The vertical blue bar coincides with periods of 6 or more months of declining real gross domestic product (real GDP). REAL GDP (Billions of dollars) 2800 2700 2600 2500 2400 1955 1956 1957 YEAR 1958 1959 ?Describe the following term in your own words. StagflationA futures market trades contracts on the growth rate for nominal GDP. The contract pays $X to the buyer, where X is 100 times the growth rate in nominal GDP from last year to this year. For example, if nominal GDP grows by 1% over last year, the contract pays $100 (1 x 100). Nominal GDP last year was $28,137 billion. Contracts on the futures markets are currently selling for $460. What is the market's prediction for nominal GDP this year? Put your answer in billions. You may round to two decimal places.
- There are two theories regarding the cause of recessions. Between the two, which one contributes more to it? Explain thoroughly. Provide examples when necessary.Businesses in the nation of Islandia have been accumulating cash because they have a pessimistic outlook of the national economy. Recent changes in the economic outlook of Islandia have caused business leaders to begin to invest some of their accumulated cash. Suppose that businesses in the country invest a total of $40 billion of this cash. Instructions: Enter a positive number to show an increase and a negative number to show a decrease. a. What would be the maximum expected change in GDP if Islandia's marginal propensity to consume (MPC) is 0.75? $ billion b. Suppose that the recent economic outlook in the country of Mountainia has been the opposite. Businesses have postponed planned investments and have begun to accumulate cash. If businesses in Mountainia postpone $12 billion of their planned investments, what would be the maximum expected change in GDP if its marginal propensity to save (MPS) is 0.05? $ billion1. Key facts about economic fluctuations The graph included below approximates United States business cycles between quarter one of 1947 and quarter three of 1951. The shaded region denotes periods of six or more consecutive months of declining real gross domestic product (real GDP). REAL GDP (Billions of dollars) 2170 2070 1970 1870 1770 1947 1948 1949 YEAR 1950 1951 ?
