Refer to Figure 12-3. Suppose the economy is at point C. If investment spending decreases in the economy, where will the eventual long-run equilibrium be? Figure 12-3 Price level (GDP deflator, 2000100) OA B OC D None of the above LRAS SRAS, SRAS AD₂ AD₁ Real GDP (trillions of 2000 dollars)
Q: What makes the Smoot-Hawley tariff act interesting? What was the Smoot-Hawley tariff act? How…
A: A tariff refers to a type of tax or duty that is imposed by the government on the imported or…
Q: Refer to Figure 9.7. If MR = $9, then in the long run, the firm will shut down. new firms will enter…
A: Under perfect competition market structure there are large no of sellers , sellung homogenous…
Q: Consider the following numerical example of the IS-LM model: C = 207 +0.45% /= 150+0.21Y-1,099/ G =…
A: IS curve shows the line joining the points of goods market equilibrium. LM curve shows the line…
Q: For the Deepwater Horizon recreation study, all of the following are true except: Select one: O a.…
A: The Deepwater Horizon recreation study was a comprehensive research effort to assess the impact of…
Q: How is Dead Weight Loss Calculated & Graphed?
A: Deadweight loss refers to the economic inefficiency caused by a market intervention, such as a price…
Q: QUESTION 1 For the utility function U = Qx0.50Qy(1-0.50) and the budget 122 = 8Qx + 14Qy find the…
A: The utility function is given as The budget is given as The price of X is increased by a factor of…
Q: In Chapter 1, Pride, Hughes, and Kapoor (2023) describes four types of competition that exists in…
A: Monoolistic Competition:Monopolistic competition is a market structure characterized by many firms…
Q: A firm is considering the following alternatives, as well as a third choice: do nothing. Each…
A: Net present worth helps to determine the current value of a future flow of payments from a project,…
Q: FIND and graph the TC, AFC, AVC, AC, and MC from the following table. unit FC VC 0 $50 $0 1 $50…
A: The variable costs and fixed costs are given in the table below:Output…
Q: Find the capitalized cost for the following cash flows occurring over an infinite number of periods,…
A: On a company's balance sheet, a fixed asset's capitalised cost is an expense that is added to the…
Q: lements of fiscal policy that move the budget toward surplus as the economy expands and toward…
A: The fiscal policy refers to the policy of government concerning expenditure and taxes. The…
Q: Instead, suppose the government taxes bucket hats. The following graph shows the annual supply and…
A: The government imposed taxes on windbreakers. A $30 tax is levied, which shifts the supply curve…
Q: Consider an economy that begins in a situation in which output equals potential output. Consider the…
A: Macroeconomic equilibrium refers to a state in the economy where the total quantity of goods and…
Q: In the figure to the right, the importing country imposes a tariff that raises the domestic price…
A: It can be defined as a duty that is imposed by the central authority of the economy on the import…
Q: The GDP of a country was $300 billion in 2016. In 2017, consumption spending increased by $200…
A: GDP is the sum of consumption expenditure, investment expenditure, government expenditure, and net…
Q: decrease in autonomous consumption will 1) shift the aggregate expenditure function…
A: Autonomous consumption implies the consumption expenditure incurred by an entity on products and…
Q: Question 23 Figure 6-5 Price Quantity Refer to Figure 6-5. The section of the demand curve labeled…
A: Demand curve shows different combinations of price and quantity demanded.
Q: This graph illustrates the demand for a normal good. A movement from A to C on the graph presented…
A: The demand curve is the downward-sloping curve. The supply curve is the upward-sloping curve. The…
Q: Suppose the price of a chicken sandwich increased from $2 to $4 and the quantity demanded fell by…
A: It measures the responsiveness or degree of a quantity demanded to change as the price changes.…
Q: Suppose there are fixed costs and the marginal costs are constant. Then we know that Select one: a.…
A: The fixed cost refers to the cost that does not change with change in level of output. The variable…
Q: 2. Taxes paid for a given income level Poornima is getting ready to do her taxes. She is single and…
A: The amount of additional tax paid for each additional dollar of income earned is known as the…
Q: Consider a simple economy that produces two goods: beers and donuts. The following table shows the…
A: Gross domestic product measures the market value of final goods and services produced by a nation…
Q: (14 of 15) Suppose that in 2015 your salary was 40,000, and the CPI was 175. Further suppose that in…
A: % increase in nominal salary between 2015 and 2016 = {[Salary (2016) - Salary (2015)] / Salary…
Q: dont use chatgpt i will 5 upvot How does pollution violate consumers’ negative right? A. They are…
A: Consumer refers to an individual or entity that buys goods or services for the purpose of the…
Q: The pandemic caused the economy to slow down. Which one of the following is correct to speed up…
A: This can be described as a tool for the government of the nation to collect the revenue for the…
Q: If a nominal interest rate of 8% is compounded continuously, determine the unknown quantity in each…
A: Present worth, also known as present value, is a financial concept used to evaluate the current…
Q: 1) Suppose the U.S. government wants to stop importing foreign cars. They believe by not importing…
A: In this case, we have to discuss the terms absolute advantage and comparative advantage.. The…
Q: darsh is tasked with projecting financial compensation policy strategies for new hires in his…
A: The labor market, frequently alluded to as the job market, alludes to the supply and demand for…
Q: The table below depicts the cost and demand structure a natural monopoly faces. Calculate total…
A: Marginal Revenue:Marginal revenue is the additional revenue that a firm earns from selling one more…
Q: Suppose a small economy produces only smart TVs. In year one, 84,000 TVs are produced and sold at a…
A: The Real GDP is the value of the goods and services produced in the economy adjusted for…
Q: Draw a graph showing the aggregate production function, assuming diminishing marginal returns to…
A: An aggregate production function illustrates how an economy's total output, consisting of goods and…
Q: Required information A company that manufactures magnetic flow meters expects to undertake a project…
A: Equivalent Annual Cost (EUAC) is used to evaluate the cost of an investment or project on an annual…
Q: Reggie owns and operates a cheese shop in the village of Somerset. While Reggie has a degree in…
A: Reggie owns and operates a cheese shop. Following are revenues and expenses made by Reggie.Revenue =…
Q: According to the income elasticity formula, Income elasticity of demand = Ej= % change in quantity…
A: Income elasticity is calculated as the percentage change in quantity divided by the percentage…
Q: Dollars C BA 0 d Multiple Choice MC ATC Quantity Refer to the diagram. At output level Q, total cost…
A: Total cost is the product of quantity and the prices. In simpler words, it means the sum total of…
Q: Use the black point (plus symbol) to indicate the equilibrium price and quantity of motor scooters.…
A: Consumer Surplus:Consumer surplus refers to the difference between what consumers are willing to pay…
Q: Anthony has set aside $120 each month for his favorite activities-buying records and going to…
A: Hicksian Substitution effect: In this case some changes in income are being provided to the consumer…
Q: Assume that bob has a Cobb Douglas utility function U (F,H) = A F^0.7 H^0.3 over Food F and Housing…
A: The utility function gives a functional representation of commodities consumed which yields…
Q: 4. Sectoral shifts, frictional unemployment, and job searches Suppose the world price of tobacco…
A: Structural Unemployment:Unemployment caused by a mismatch between the skills possessed by workers…
Q: quantity of bread 100 90 80 70- 60 50 40 30 20 10 B 10 20 30 40 50 60 70.80 quantity of apples Juan…
A: The link between the amount of a product that is demanded and its corresponding price is shown by a…
Q: A 5 percent increase in the price of digital apps reduces the number of tablet devices demanded by 2…
A: PED (Price elasticity of demand)PED measures the responsiveness or sensitivity of changes in price…
Q: Assume the cost of making 30 belts $800 the cost of makin 35 belts $900 and the cost equation is…
A: Marginal cost measures the change in total cost due to a change in quantity produced. Marginal cost…
Q: A drugstore will sell Elmo as much Coke as he wants at a pric The salesperson will take any…
A: Indifference curves refers to the locus of points at which a consumer is equaly satisfied on all…
Q: The national debt is a Select one: O A. flow; flow O B. stock; stock. O C. stock; flow OD. flow;…
A: The national debt and federal government's budget deficit are both economic variables that fall…
Q: Consider the market described by the graph below where the vertical distance between points A and B…
A: In today's economic environment, taxation is critical since it provides governments with cash to…
Q: In a perfectly competitive market there is a donut shop that sells 1,200 donuts daily. Each donut…
A: In perfect competition, There exists a large number of buyers and sellers. The firm will produce…
Q: Which of the following is likely to make demand MORE elastic? O a. A longer time horizon O b. A…
A: The Elasticity of demand measures the degree of responsiveness of demand to change in its…
Q: Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs of production.…
A: A production function is a concept in economics that represents the relationship between inputs…
Q: The miracle of markets A. occurs when consumers and businesses make self - interested smart choices…
A: The market miracle is a process where self-interested choices by consumers and businesses, driven by…
Q: Sarah is trying to decide how to divide her time between her job as a wedding photographer, which…
A: Diminishing marginal returns refers to the decrease in the incremental output or benefit derived…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Given the macro economic data below, draw a graph to illustrate if there is arecessionary gap in the given economy.Real GDP $1000BConsumption (100K is Autonomous) $600BInvestment $100BGovernment Spending $200BExport $50BImport $50BMarginal Propensity to Consume 0.50 AD (Expenditure) 45 degree AD = AS $ 1000B AS (Real GDP) a. Calculate the size of the recessionary gap in the economy. b. What would happen to the recessionary gap if the government cut incometaxes by $50B? c. What would happen to the recessionary gap if the Fed increased discountrates? Explain your answer.a) About Country A, what is your estimate of the country's marginal propensity to consume (MPC) based on the following information on its GDP (Y) and the components thereof (in billion dollars) for two past years? Show calculation. Year 1 Year 2 c) GDP C I 11200 8000 2200 12000 8500 2400 G 800 880 The next few parts are about Country B, whose government plans to cut taxes by $24 billion as a measure to fight the current recession. The marginal propensity to consume (MPC) in Country B is known to be 34. There will be no crowding-out effect. e) NX 200 220 b) What is the initial effect (in billion dollars) of the tax cut on Country B's aggregate demand? (The "initial effect" here refers to the effect on AD after only the first round of increased spending.) What is the total effect of the tax cut on aggregate demand? Explain why it is different from the initial effect. d) How does the total effect of this $24 billion tax cut compare to the total effect of a $24 billion increase in…ingr Income (GDP = DI) $480 520 560 600 640 680 720 760 800 Consumption 512 536 560 504 608 632 b. If the MPC is 0.75? 656 680 704 Saving $-32 -16 0 16 32 48 64 80 96 What is the value of the marginal propensity to consume? APC Instructions: Round your answer to the nearest whole number. Change in GDP = billion. 1.067 0.990 0.880 APS -0.067 0.027 a. By how much will GDP change if firms increase their investment by $9 billion and the MPC is 0.9? Instructions: Round your answer to the nearest whole number. Change in GDP- 9 billion. 0.120
- Use the information in the following table to do exercises 8-15: silt 1 $20 $20 $4800 $20 $700xi $660 $20 Y $100 $300 $500 с $120 $300 G $30 $30 $30 $30 X $10 -$10 -$30 0-$5011:04 AM ECON 122 CAT ONE.docX Phoenix Files QUESTION ONE Is it desirable for a country to have a large gross domestic product? Explain (2 marks) QUESTION TWO You are given data on the following variables in an economy Government spending 300 Planned investment Net exports Autonomous taxes Income tax rate Marginal propensity to consume 0.5 a) Consumption (C) is 600 when income (Y) is equal to 1500. Solve for autonom ous consumption (2 ma rks) ii) 200 S 50 b) Solve for the equilibrium level of output in the following two scenarios: i) There is an income tax t=0.1, Edit 0.1 250 Q Search © | 46| 472 [ 66 c) In the economy with an income tax of 10%, what is the budget balance of the government? (2 marks) O X: × There is no income tax in the economy. Denote these two variables by Yw and YN respectively. (4 marks) d) Solve for the change in net exports that would bring the equilibrium output lev el in the economy with the income tax to the level of YN that you found in part b. specify both…Which of the following components makes up the largest percentage of GDP measured by aggregate spending? O imports O government purchases of goods and services consumer spending investment spending О ехрorts
- Aggregate planned expenditure (trillions of 2009 dollars) 7 1 45° line AE2 AEO 2a) b) plan in th B A AE1 3a) 15 3 4 14 0 14 15 16 17 18 19 Real GDP (trillions of 2009 dollars) In the above figure the economy is initially at point A on the aggregate expenditure curve AEQ. Suppose investment decreases. As a result the AE curve shifts upward to a curve such as AE2. the AE curve shifts downward to a curve such as AE1. O there is a movement along AEO to a point such as B. O there is a movement along AEO to a point such as C. 5 6 7 81 90 100 109 b) T c) T d) It e) $1paper a pen and a calculator in order to solve the fo Problem 1 The various expenditure categories within the economy are: C = 600+ 0.8Yd | - 800 G = 600 NX = 0 T = 700 Refer to problem 1. Equilibrium Real GDP is *Calculate consumption expenditure given that:- APC = 0.16 Income = $5000
- In the economy of Kwartengland, the following figures are given for economic activity which was undertaken in 2013. All the figures are million Ghana Cedis Consumption Expenditure = 1000 + 0.8 YD Investment Spending= 600 Government Expenditure = 2450 Personal Taxes= 100 Exports= 100 Imports= 150 1. Calculate the equilibrium real GDP for the economy 2. What is the level of consumption at the equilibrium level of GDP 3. Calculate the investment and tax multipliers 4. By how much should exports change if government wishes to increase real GDP by 1000?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 qaptCThe following equations describe an economy C = 100 + 0.75 Y. I = 50 – 25i where C' is aggregate consumption , Y is disposable income, I is aggre gate investment, Tis taxes, G is go vernment purchases and i is the int erest rate. Derive the IS curve for th T= G= 50 e economy.