Assume that the economy has an inflationary gap. Explain how the economy will remove this gap without government intervention. Use graphs to illustrate your answer. (Provide graph)
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Assume that the economy has an inflationary gap. Explain how the economy will remove this gap without government intervention. Use graphs to illustrate your answer. (Provide graph)
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- Explain how a drop in GDP can influence the level of the interest rate (in 7 lines maximum). A captioned graphic illustration is requiredA small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 40 30 10 2021 12 60 50 12 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 3 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? 1.The GDP deflator holds the basket of goods and services constant. 2.The inflation rate in 2021 is not the same using the two methods. 3. The CPI allows the basket of goods and services to change.A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 10 20 50 13 2021 15 30 60 15 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 5.
- A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 20 50 60 5 2021 21 70 80 6 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 2 karaoke machines and 6 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? Check all that apply. The GDP deflator holds the basket of goods and services constant. The CPI holds the basket of goods and services constant. The inflation rate in 2021 is the same using the two methods.A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDs Quantity Price Quantity Price (Dollars) (Dollars) 2020 20 50 60 5 2021 21 70 80 6 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is . (Note: Use 2020 as the base year, and fix the basket at 2 karaoke machines and 6 CDs.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is . (Note: Again, use 2020 as the base year.) Which of the following statements is correct? Check all that apply. The CPI allows the basket of goods and services to change. The GDP deflator allows the basket of goods and services to change. The inflation rate in 2021 is not the same using the two methods.please answer the following question: 1. Suppose that the economy has an inflationary gap. Which of the following policies would most likely help the situation?(Select All that Apply)A. Reductions in agricultural subsidies and veterans' benefits.B. Postponement of a highway construction program.C. Reductions in Federal tax rates on personal and corporate income.D. Increase in Federal tax rates on personal income.E. Provide American household with direct relief during a pandemic.F. Provide small businesses with funds to pay payroll.
- Answer choices for part 1 blanks: Blank 1: shortage, surplus Blank 2: falls, remains the same, rises Blank 3: decrease, do not change, increase Blank 4: decrease, do not change, increase There is one last part to this question that did not fit in the picture: Suppose the economy experiences domestic goods become relatively less expensive than foreign goods. Adjust the graph to show the effect of domestic goods become relatively less expensive than foreign goods on the economy. Which of the following best describes the effect of domestic goods become relatively less expensive than foreign goods? a.) The price level rises back to PE, and Real GDP increases from $30 trillion to $35 trillion. b.) The price level rises even higher above PE, and Real GDP increases from $30 trillion to $35 trillion. c.) The price level falls even further below PE, and Real GDP decreases from $30 trillion to $35 trillion. d.) The price level falls but remains above PE and Real GDP…the phrase "a sustained increase in the average level of prices for goods and services in an economy over time" describes which of the following terms?A consumer expenditure survey reports the following information on consumer protein spending: Fish Chicken Beef Multiple Choice Multiple Choice 0.9 percent 1.4 percent Price $ 5.80 1.8 percent $3 $ 3.10 Using 2019 as the base year, by how much does a "cost of protein" index decrease between 2019 and 2020? 3.6 percent 2019 Quantity 5 14 7 Using 2019 as the base year, by how much does a "cost of protein index decrease between 2019 and 2020? Price $7 $ 1.50 $5 2020 Quantity 6 12 10 G
- b) Why is GDP critically linked with inflation and unemployment rate?Use the figure below to answer the following questions. Household expenditure (thousands of dollars per year) 32- 24 16 00 8 16 24 32 40 Household income (thousands of dollars per year) Figure 1A.3.1 The slope of the line in Figure 1A.3.1 isRefer to the following table when answering the following questions. In this economy, only two goods are produced: video games and pistachios. Table 2.3: National Income Accounting 2017 2018 Quantity of pistachios Quantity of video games Price of pistachios Price of video games 1,000 1,200 Question 16 540 540 $1.00 $1.40 $15.50$14.75 Consider Table 2.3. Using the Laspeyres index, the real GDP in 2018 is $ Using the same Table 2.3, real GDP in 2017 based on the Paasche index is $