How are aggregate output and the real interest rate determined in competitive egulibrum? OA The aggregate ouput can be found by multiplying curent employment by current real wage at the intesection of the current labour spply and demand curves, given the raal inderest rate and subtracting the level of investment in the economy OB. Cument aggregate oulpul and the real interest rate are determined by the intersection of the outpiut supply and demand ourves OC. Curent aggregate output can be found by finding current omployment htrom the internection.of the curent labour supply and domand ourves gven the real irterest rate and accounting tor lutal tactor productivity OD. The real interest rate is determined by the slope of the output supply ourve at a given level of aggregato output

Imagine that the government statisticians who calculate the inflation rate have been updating the basic basket of goods once every 10 years, but now they decide to update it every five years. How will this Change affect the amount of substitution bias and quality/new goods bias?

Why do you mink the U.S. experience with inflation over the last 50 years has been so much milder than in many other countries?

How to Measure Changes in the Cost of Living introduced a number of different price indices. Which price index would be best to use to adjust your paycheck for inflation?

Construct the price index for a fruit basket in each year using 2003 as the base year.

Why is the GDP deflator not an accurate measure of inflation as it impacts a household?

Exercise D25 What role does government play in stabilizing the economy and what are the tradeoffs that must be considered?

What are typical GDP patterns for a high-income economy like the United States in the long run and the short run?

If you an? out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greater at Wal-Mart are you considered employed or not in the labor force?

The short run aggregate supply curve was constructed assuming that as the price of outputs increases, the puce of inputs stays the same. How would an increase in the prices of important inputs, like energy, affect aggregate supply?