The diagram below shows alternate paths for two hypothetical economies, each starting with GDP of $1 billion. Assume that Area 1 is equal to Area 2. Real Conmption FIGURE 25-1 Area 1 Year X Area 2 Time Year Y Economy B 2% growth Economy A 1% growth W Refer to Figure 25-1. Suppose Economy A jumps to the path of Economy B at Year O by increasing the share of GDP that is saved. In that case, which of the following statements about Economy A is true? Oa. By jumping to a new growth path at Year 0, Economy A has increased the share of national income that is consumed. O b. By Year Y, the increase in consumption made possible by the economy's higher growth rate approximately equals the consumption sacrificed in earlier years. Oc By Year X, Economy A is saving and investing the same share of its national income as it would have been had it stayed on its original path Od Economy A will not be able to regain the losses in consumption it incurs by jumping to the path of Economy B By Year X Economy A is better off in terms of material living standards for having jumped to the path of Economy B

The diagram below shows alternate paths for two hypothetical economies, each starting with GDP of $1 billion. Assume that Area 1 is equal to Area 2. Real Conmption FIGURE 25-1 Area 1 Year X Area 2 Time Year Y Economy B 2% growth Economy A 1% growth W Refer to Figure 25-1. Suppose Economy A jumps to the path of Economy B at Year O by increasing the share of GDP that is saved. In that case, which of the following statements about Economy A is true? Oa. By jumping to a new growth path at Year 0, Economy A has increased the share of national income that is consumed. O b. By Year Y, the increase in consumption made possible by the economy's higher growth rate approximately equals the consumption sacrificed in earlier years. Oc By Year X, Economy A is saving and investing the same share of its national income as it would have been had it stayed on its original path Od Economy A will not be able to regain the losses in consumption it incurs by jumping to the path of Economy B By Year X Economy A is better off in terms of material living standards for having jumped to the path of Economy B

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

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Real Consumption westion 1 The diagram below shows alternate paths for two hypothetical economies, each starting with GDP of $1 billion. Assume that Area 1 is equal to Area 2. at yet swered rked out of Economy B 2% growth Area 2 Flag question Еconomy A 1% growth Area 1 Year X Year Y Time FIGURE 25-1 Refer to Figure 25-1. Which of the following statements about Economies A and B is correct? Select one: O a. Economy B will sustain higher material living standards than Economy A in the long run. O b. Economies A and B will have equal material living standards beginning at Year Y. O C. Economies A and B will have equal material living standards beginning at Year 0. O d. Economy A will sustain higher material living standards than Economy B in the long run. O e. Economies A and B will have equal material living standards beginning at Year X. In a macro model with a constant nrice levelan increase in government nurchases will cause the AF curve to shift E 2°C Light rain/snow 13:01 on 2 C )…
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View History Bookmarks Tools Window Help Coy, Jonnifer - Outlo X C Martin County School District X S MyPath - Home Content https://ezto.mheducation.com/ ext/map/index.html?_con%3Dcon&external_browser%3D0&launchUrl=https%25 Saved Level of Output and Income (GDP= DI) Consumption Saving APC APS MPC MPS S480. $-16 520 560 16 60 32 640 48 680 64 720 80 760 96 800 112 Des Instructions: Enter your answer as a whole number. b. What is the break-even level of income in the table? What is the term that economists use for the saving situation shown at the $480 level of income? (Click to select) Y c. For each of the following items, indicate whether the value in the table is either constant or variable as income chanc The MPS: (Click to select) The APC: (Click to select) The MPC: (Click to select) The APS: (Click to select) aw Prev 1 of 1 JAN 11 %24
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