Price level (GDP deflator, 2009=100) Millennials Are Starting to Spend More Millennials, who spend an average of $85 a day, are expected to spend at a higher rate in the next fifteen years. Only 37 percent of Americans report higher spending today than a year ago, while 42 percent of millennials say they are spending more. Millennials are spending more on rent or mortgages and leisure activities than they were spending a year ago. 140- 130- Source: Business Journal, May 25, 2016 120- Describe the macroeconomic equilibrium after the change in spending by millennials. If the economy had been at a below full-employment equilibrium, then the economy will A. move to an above full-employment equilibrium with real GDP less than potential GDP B. move to a full-employment equilibrium as short-run aggregate supply increases at the same time 'C. move to a full-employment equilibrium and equilibrium real GDP equals potential GDP D. remain stuck in a below full-employment equilibrium If the economy had been at a full-employment equilibrium, then the economy will be at the short run. In the long run, the money wage rate A. an above full-employment; falls B. an above full-employment; rises C. a below full-employment; falls D. a below full-employment; rises equilibrium in to restore a full-employment equilibrium. The graph shows the U.S. economy when it is operating at a below full-employment equilibrium. Draw a curve that shows the effect of a rise in spending by millennials. Label it. Draw a point at the new macroeconomic equilibrium. 110- 100- 90- 80+ 15.0 16.0 17.0 LAS SASO 18.0 ADO ㅇ 선 19.0 20.0 Real GDP (trillions of 2009 dollars) >>> Draw only the objects specified in the question.

Last year, a small nation with abundant forests cut down 200 worth of trees. It then turned 100 worth of trees into 150 worth of lumber. It used 100 worth of that lumber to produce $250 worth of bookshelves. Assuming the country produces no other outputs, and there are no other inputs used in producing trees, lumber, and bookshelves, what is this nations GDP? In other words, what is the value of the final goods the nation produced including trees, lumber and bookshelves?

What are the two main difficulties that arise in comparing different comparing GDP?

Should people typically pay more attention to their real income or their nominal income? If you Choose the latter, why would that make sense in todays world? Would your answer he the same for the 1970s?