In the basic AD/AS model, a could cause stagflation. a. Widespread outbreak of a serious infectious disease. O b. Large decrease in wages. O c. Large increase in business confidence. O d. Large decrease in the net tax rate. O e. Large increase in labour productivity.
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- The formula for aggregate expenditure is Select one: O O O a. AE = C+/+ G + NX. b. AE = C+/+G+ NX-depreciation. C. AE=C+I+ G- NX. Macroeconomic indicators can be categorized as "leading" or "lagging". WhicWhich of the following policies will NOT shift the Aggregate Expenditure curve upward? Select one: O a. increasing autonomous taxes O b. decreasing autonomous taxes O c. increasing autonomous transfer payments O d. increasing government expenditures on goods and services"The following chart indicates the aggregate demand (AD) and short-run aggregate supply (SRAS) schedules of decision- makers for the current period. Both buyers and sellers previ- ously anticipated that the price level during the current period would be P 105 a. Indicate the quantity of GDP that will be produced during this period. b. Will it be a long-run equilibrium level of GDP? Why or why not? c. What will the relationship between the actual and natural rates of unemployment be during the period? Explain 20 your answer.
- Suppose an economy can be represented by the folowing table, in which employment is in millons of workers and GDP and AE are expressed in billions of dollars: Employment 100 Real GDP Aggregate Expenditures 1275 1350 1425 1500 1575 1650 1200 105 1300 1400 1500 1600 1700 110 115 120 125 fut employment is 120 milion workers? What is its what kind of expenditure oap exists size? Suppose government spending, taxes, and net exports ane all independent of the level of rcal GDP. What is the multplier an ths economy? below the econemy's potential, what is the size of the recessionary expenditure qaptWhich of the following will NOT shift the ADT curve? O a. A rise in government spending O b. A rise in exports Ос. A rise in interest rates O d. A rise in consumer confidenceThe economy has shifted and the quantity of the real GDP supplied has increased. What has potentially happened to aggregate price levels? Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. O Potentially the price levels have decreased to a lower aggregate price level and if the wages are sticky, businesses have hired more employees as labor has become cheaper. Potentially the price levels have increased to a higher aggregate price level and if the wages are sticky, businesses have fired some employees as labor has become too expensive.
- Congratulationst You have been appointed an economic policy adviser to the United States, You are told that the economy is significantly abowe futtemplyoment GDP. Based on this inlormation, how can the economy would adjust to reach LR.SR Equilbrium (Classical View)? The economy wilt experience low unemployment rate, pushing wages up, and increasing the pelces of a key input (labor). shatting the sAS to the left (up). The economy will experience high unemployment rate, pushing wages down, and reducing the prices of a key input (labor). shiting the SAS to the right (down). The econoriny wil experience low unemployment rate, decreasing inceme, which will eventually shift the AD to the left. The eooncmy will experience low unemployment rate, pushing wages up, and increasing the prices of a key input (labor), shiting the sAs to the night (down).In the Aggregate Expenditure framework, which of the following government policy choices offer a possible solution to inflationary pressures? (Check all that apply.) Select all that apply: O a. A reduction in taxes for businesses that increase investment. O b. A major decrease in what the government spends on healthcare. Oc. A decrease in military spending. O d. A tax increase on consumer income. The United States is Canada's major export market. Suppose there is a decrease in American real GDP. The impact of this change will be a in which will mean a shift in the Canadian AE function. As a result, Canadian real GDP will decrease consumption investment upward downward net exports increaseConsider the basic AD/AS macro model. A rise in an input price like the price of oil would be expected to cause a new macroeconomic equilibrium in which the price level Select one: O a. is lower and real GDP higher than in the initial equilibrium. O b. and real GDP are higher than in the initial equilibrium. O c. is higher and real GDP remained the same as in the initial equilibrium. O d. is higher and real GDP lower than in the initial equilibrium. O e. and real GDP are lower than in the initial equilibrium.
- Consider the simple macro model with a constant price level and demand- determined output. Suppose the level of actual national income is less than desired aggregate expenditure. In this case... a. Inventories will build up, causing national income to rise. b. National income may increase or decrease, depending on the relative sizes of the average propensity to consume and the average propensity to save. O c. National income will fall, because desired expenditures are less than actual expenditures. d. There will be no change in national income because only actual expenditure is relevant. e. Shortages of goods and reductions in inventories will cause producers to increase output and national income to rise. e table below shows the total output and prices for an economy that oduces only two goods, potatoes and oil. Data is provided for the years 008 and 2018. Potatoes ($/ Oil ($ / barrel) Potatoes kkg) Oil (barrels) kg) 55 1000 1100 2008 50 14 2018 65 6 60 If 2008 is the base year, the…During the recession of 2007-2009 in the United States, relative to potential GDP. Select one: O a. net export spending rose and consumption spending declined Ob. business fixed investment spending rose and net export spending declined O c. consumption spending rose and residential construction spending declined O d. federal government purchases rose and changes in business inventories declinedCeteris paribus, which of the scenarios below will unambiguously lead to an increase in real GDP? O a. The production of final goods and services decreases, but prices increase. O b. The prices of final goods and services decrease. O c. The prices of final goods and services increase. O d. The production of final goods and services increases. ge
