Exhibit 14A-2 Macro AD-AS Model Price Level CPI 130 120 110 100 90 O 1 1 1 1 1 1 9.0 1 1 9.5 LRAS SRAS AD 10.0 10.5 11.0 11.5 Real GDP (trillions of dollars per year) In Exhibit 14A-2, the intersection of AD with SRAS indicates: O a short-run equilibrium. O a long-run equilibrium. O that the economy needs policies to reduce unemployment. O that the economy is at full employment.

Exhibit 14A-2 Macro AD-AS Model Price Level CPI 130 120 110 100 90 O 1 1 1 1 1 1 9.0 1 1 9.5 LRAS SRAS AD 10.0 10.5 11.0 11.5 Real GDP (trillions of dollars per year) In Exhibit 14A-2, the intersection of AD with SRAS indicates: O a short-run equilibrium. O a long-run equilibrium. O that the economy needs policies to reduce unemployment. O that the economy is at full employment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Table 7-2 Year 1 Year 1 Year 2 Year 2 Goods Quantities Prices Quantities Prices A 90 $1.50 80 $1.40 80 $0.60 70 $0.70 C 70 $0.40 60 $0.50 Refer to Table 7-2. GDP in Year 1 is O $215.00 O $211.00 O $186.00 O $191.00
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1. Aggregate expenditures and income The following table shows consumption (C), investment (1), government spending (G), and net exports (X-M) in a hypothetical economy for various levels of real GDP (Y). Assume that the price level remains unchanged at all levels of income. All figures are in billions of dollars. Compute aggregate expenditures for each income level and fill in the last column In the following table. Y с G 500 525 250 150 600 550 250 150 575 250 150 600 250 150 -200 900 625 250 150 -200 700 800 AL AGGREGATE EXPENDITURES (Billions of dollars) The following graph shows real GDP on the horizontal axis and aggregate expenditures (AE) on the vertical axis. The orange line (square symbols) represents a 45-degree (Y-AE) line. 1000 Use the blue points (circle symbol) to plot the aggregate expenditures line for this economy. Line segments will automatically connect the points. 900 300 I 700 X-M Aggregate Expenditures -200 725 -200 750 775 800 825 600 500 + -200 AE line *+…
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QUESTION 41 A C LRAS LRAS _LRAS 大大大 40 50 20 30 40 50 20 30 real GDP = Q 20 30 real GDP = Q real GDP = Q 60 50 40 30 20 10 P level 0 10 -AS- AD + 40 50 60 50 40 30 20 10 P level 0- 41. Which of the figures above illustrates an economy in long-run equilibrium? O a) Figure A b) Figure B c) Figure C o 10 B AS AD 60 50 40 30 20 10 P level 0 10 -AS AD