Suppose an economy can be represented by the folowing table, in which employment is in millons ofworkers and GDP and AE are expressed in billions of dollars:Employment100Real GDPAggregate Expenditures127513501425150015751650120010513001400150016001700110115120125fut employment is 120 milion workers? What is itswhat kind of expenditure oap existssize?Suppose government spending, taxes, and net exports ane all independent of the level of rcalGDP. What is the multplier an ths economy?below the econemy's potential, what is the size of the recessionary expenditure qapt

The measure that depicts the final value of goods and services that are being produced within an…

Suppose an economy can be represented by the following table, in which employment is in millions of workers and GDP and AE are expressed in billions of dollars: Employment 100 Real GDP Aggregate Expenditures 1200 1275 105 1300 1350 110 1400 1425 115 1500 1500 120 1600 1575 125 1700 1650 Use the table to answer the following: a. What is the equilibrium level of GDP? b. What kind of expenditure gap exists if full employment is 120 million workers? What is its size? c Suppose government spending, taxes, and net exports are all independent of the level of real GDP. What is the multiplier in this economy? d. Suppose instead that the economy is producing at equilibrium GDp. If this GDP is $200 billion below the econormy's potential, what is the size of the recessionary expenditure gap?

Suppose an economy can be represented by the following table, in which employment is in millions of workers and GDP and AE are expressed in billions of dollars: Employment 100 Real GDP Aggregate Expenditures 1200 1275 105 1300 1350 110 1400 1425 115 1500 1500 120 1600 1575 125 1700 1650 Use the table to answer the following: a. What is the equilibrium level of GDP? b. What kind of expenditure gap exists if full employment is 120 million workers? What is its size? c Suppose government spending, taxes, and net exports are all independent of the level of real GDP. What is the multiplier in this economy? d. Suppose instead that the economy is producing at equilibrium GDp. If this GDP is $200 billion below the econormy's potential, what is the size of the recessionary expenditure gap?

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 5CQQ

See similar textbooks

Similar questions

Early during the COVID-19 pandemic, the government used multiple stimulus packages to increase government spending. 3. Using the Z-Y, NX-Y, IS-LM, UIP combined graph on the next page, what should be happening as a result? Show the shifts on the graph itself. NN Z Z NN Y=Z Z c0- if f UI i pvt L M c1T+I+G+NX i10 y 45° if f if NK N Y Y f 0 Y X Y 0 Y 0 Y 20 NX N X E 0 E Y NX Fiscal stimulus
Asthebabyboomergenerationretires,whatshould happen to wages and employment? Can you show this graphically?
Some economists believe that the U.S. economy as awhole can be modeled with the following productionfunction, called the O,bb-Douglas prod11ctio11 Ju11ctio11:Y = AK1/3 L 2/3,where Y is the amount ol outpu~ K is cl,e amount ofcapital, Lis the an10u.nt of labor, and A is a paran,eterthat measures the slate of technology. For this productionfunction, tl,e marginal product of labor isMPL = (2/3) A(K/ L)1/3 ·Suppose that the price of output Pis 2, A is 3, K is1,000,000, and Lis 1,000. The labor market is competitive,so labor is paid the value of its marginal product.a. Calcula te cl,e amount of output produced Y and thedollar value ol output PY.b. Calcula te cl,e wage Wand cl,e real wage W JP. (Note:11,e wage is labor compensation measured in dol•lars, whereas the real wage is labor compensationmeasured in units ol output.)c. Calcula te cl,e labor share (the fraction of the value ofoutpu t that is paid to labor), which is (Wl.)/(PY).d. Calcula te what happens to output Y, the wage W,the…
Why does substitution bias arise if we calculate the inflation rate based on a fixed basket of goods?
please asnwer the question in the image Some economists believe that the U.S. economy as awhole can be modeled with the following productionfunction, called the Cobb–Douglas production function:Y 5 AK1/3L2/3,where Y is the amount of output, K is the amount ofcapital, L is the amount of labor, and A is a parameterthat measures the state of technology. For this productionfunction, the marginal product of labor isMPL 5 (2/3) A(K/L)1/3.Suppose that the price of output P is 2, A is 3, K is1,000,000, and L is 1,000. The labor market is competitive,so labor is paid the value of its marginal product.a. Calculate the amount of output produced Y and thedollar value of output PY.b. Calculate the wage W and the real wage W/P. (Note:The wage is labor compensation measured in dollars,whereas the real wage is labor compensationmeasured in units of output.)c. Calculate the labor share (the fraction of the value ofoutput that is paid to labor), which is (WL)/(PY).d. Calculate what happens to output Y,…
In a country called Uncle Sam Land (USL), the labor demand curve is given by:W = K- 4LWhere W is the wage rate, K is a variabledetermined by accumulated capital stock in thecountry, and L is the labor force in the country.K= 50 is supplied by the capitalists.If the labor force in this country goes up from 10 to 11, what happens to the national income in USL?National Income = income of all workers + income of all capitalists.Select one:a. Does not changeb. Goes down by 44c. Goes up by 8d. Goes up by 26e. None of the above.
QUESTION 21 A E В Time In the accompanying diagram, which phase of the business cycle would be most closely associated with an economic contraction? O a.B Ob.A O.D Od.C Level of Business Activity
Read the following paragraph: Aoccdrnig to a rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a total mses and you can sitll raed it wouthit porbelm. The fact that you could read this paragraph is most likely due to? top-down processing continuity bottom-up processing occlusion
How do i trace this scenario on the circlar flow model, firms inventories unexpectedely rise?
As described in the article entitled "The Thomy Economics of legal immigration, Arizona adopted legislation that restricted (by as much as 40%) the number of legal immigrants coming into the state. This had the economic effect of OA Reducing Arizona's GOP but had the intended effect of atering production processes as employers hired more workers OB increasing overall output in the state as the supply of goods increased (as costs were falling) C Reducing Arizona's GDP OD. Decreasing the wage rates for and increasing the total employment of unsalted labor in the s
The United States has established a progressive income tax system, where a worker’s tax rate onearnings increases as she earns more money. There are 168 hours in a given week. Assume thatfor the first 56 hours worked, the tax rate is t1, which means that the net real wage is w*(1-t1).After working the 56th hour, the worker jumps to a higher tax rate t2. After the 112th hourworked, the individual jumps to an even higher tax rate, t3.(a) During most election years, some politicians argue that a having a flat tax system isbetter. Assume that there is a proposal to institute a flat tax, where all workers pay a taxrate equal to t4, which is greater than t3. On the same set of axes, graph the budgetconstraints associated with the progressive tax system and the flat tax system. Make sureto label all of the slopes.(b) Would moving to this proposed flat tax system likely encourage more or fewer hoursworked for relatively high-wage workers? Make sure to explain your answer (a writtenexplanation…
TheeconomyofGhana ismadeupofthreesectorsnamelyAgriculture,Industryand Se rvice s. The se thre e sectors contribute to the national output. For de cade s prior to the 2000s, the Agricultural sector contributed the most to the national output. Sadly, in recent years however, the sector has been the least contributor to national output. Trends in production of major food crops such as maize, rice and sorghum show that on-farm productivity has stagnated and the exploitable difference between the actual and the potential output of most ofthe crops (yield gap) has widened. Low and inadequate levelsofusageofproductivityenhancingtechnologiessuchasqualityseeds of improved varieties and fertilizer, thin extension services and weak market linkages contributes to the poor agricultural performance. It was against this background that theNPP-led government implemented one of her flagship programmes “Planting for Food and Jobs”. The programme is primarily aimed at making subsidized improved seeds and…