What common rule of thumb do economists use to define a recession? A decline of 5% in GDP A decline of 10% in GDP One quarter of negative GDP growth Two quarters (six months)of negative GDP growth
Q: Which of the below did NOT happen during the Great Recession of Dec. 2007 - June 2009? Group of…
A: During financial crisis, banks had stopped lending and credit market freezed because of…
Q: A broad based increase in taxes will lead to A an increase in households' disposable income and will…
A: If the broad based taxes increase the disposable income of people will fall and they will be willing…
Q: Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals…
A: Gross domestic product: Gross domestic product or GDP is an standard measure which includes the…
Q: If current real GDP = $52 trillion and potential real GDP = $61 trillion, then the “GDP gap” = Group…
A: GDP measures the value of goods and services that are produced with in the country during a period…
Q: a change in business investment a determinant of aggregate demand or aggregate supply? What happens…
A: The entire amount of money or sales profits that the seller expects to receive from the sale of…
Q: If firms are less optimistic that future profits will rise and remain strong for the next few years,…
A: Answer to the question is as follows :
Q: In South Africa state-owned enterprises (SOE) and labour unions are currently putting pressure on…
A: Government expenditure is important for economy. Politicians,bureaucrats,interest groups have the…
Q: six (6) strategies that the Minister of Finance could implement to reduce the consequences of the…
A: Recession is a situation in which all the economic activities are shut down.
Q: Imagine that you are a financial manager for a medium-sized company. Describe how you would use…
A: We show that There àre various ways to use a budget that helps investment decisions. These…
Q: Which of the following is a correct statement about the difference between chain-weighted and…
A: The chain-weighted method and the fixed-weighted methods are used to calculate the growth rates of…
Q: Refer to the setup of 2 questions ago. An increase in government spending would Group of answer…
A: Government spending is the amount of money spent by the government on purchasing products and…
Q: Analyse the action that government can take to assist the economy during a recession
A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…
Q: In australia,What happened to government purchases between 1960 and 2016? Select one: a. they…
A: Government purchases is that part of GDP which is contributed because of spending done by…
Q: In the long run, the level of national income in an economy is determined by its: Select one: a.…
A: In the short run, the degree of public pay is dictated by total demand and total supply. The supply…
Q: Aggregate demand is the total quantity of output A)consumers actually buy. B) producers are…
A: Aggregate demand is the sum of four components: consumption, investment, government spending, and…
Q: According to the textbook definition, a recession occurs if ___ GDP decreases for ____ Question…
A: If nominal GDP decreases for consecutive 2 quarters,then recession occurs.
Q: If actual GDP is less than potential GDP: Group of answer choices businesses are producing at…
A: When Aggregate demand and aggregate supply are equal , goods market is in equilibrium . And it…
Q: The amount by which equilibrium real GDP exceeds full-employment GDP is known as (2pts) Question 12…
A: The amount by which equilibrium real GDP exceeds full-employment GDP is known a ____________________
Q: In 1968, mandatory government spending was approximately ________ of GDP and in 2108 mandatory…
A: Government spending is in the form of making expenditures on the social welfare of the society which…
Q: Gross Domestic Product equals $1.2 trillion. If consumption equals $690 billion, investment equals…
A: When talking about gross domestic product, it is the sum of the expenditure made by domestic…
Q: Aggregate demand (AD) is A,B,C, OR D A total spending, economy-wide, on durable goods and services.…
A: The aggregate demand refers to the total demand for all goods and services in an economy. It helps…
Q: Households tend to increase their spending during a recession because they realize that more…
A: Recession:- Recession can be defined as a period of economic contraction during which economic trade…
Q: Research on the effects of recessions on the real level of GDP shows that recessions cause…
A: Turning points in business cycles occur when the economy is at its peak or trough in the business…
Q: Pundits have stated that the recent tax cut mainly benefits companies. The benefit to companies can…
A: Lower tax rates increase the spending power of consumers and may increase aggregate demand,…
Q: increase in the amount of capital that firms purchase would initially shift: Question 52 options:…
A: A rise in the value of an asset or investment over time is called capital growth or capital…
Q: Compare the impact of a recession that reduces consumer income by 10 percent on the consumption of…
A: Income elasticity of demand = % change in demand% change in income % change in demand = Income…
Q: Which of the following policies does not make any economic sense? Group of answer choices lowering…
A: A boom refers to a time of increased economic activity within a sector, a corporation, an industry,…
Q: An increase in the price of a barrel of oil will shift the aggregate demand curve to the left and…
A: Increase or decrease in input costs affect aggregate supply curve.
Q: The three main objectives of the national economy are price stability, full employment, and economic…
A: Fiscal policy is the term used to describe the way in which the government manages the amount of…
Q: Government spending on unemployment benefits, welfare, Medicare, and other programs during a…
A: Recession: It is an economic situation where the aggregate demand in the economy falls causing the…
Q: The level of a country’s private investment tends to be very volatile because… Select one: a.…
A: Aggregate demand = consumption + Gross investments + government spending + Net exports Private…
Q: Which of the following statements regarding the discount rate is correct? a. The private discount…
A: Discount rates are classified as private & social discount rates. A discount rate is used to…
Q: Assuming this market is representative of the economy as a whole, this economy: 1) is highly…
A: Macroeconomics is the study of economics that deal economy as a whole. It deals with the issues that…
Q: Income tax collections: Group of answer choices rise during a recession, thus reduce the severity of…
A: *Answer:
Q: Potential real GDP is defined as: Group of answer choices The quantity of output that the economy…
A: Real GDP is the value of final goods and services produced in the economy within a given period of…
Q: Which of the following scenarios is an example of a recognition lag? The economy: a)enters a deep…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If you…
Q: When taxes increase, consumption _____, business investment ______, and real GDP output ______. A.…
A: An increase in taxes leads to a fall in the disposable income available for consumption. This…
Q: Calculate growth in GDP under the following conditions (show calculations): Government spending…
A: Gross domestic product (GDP) refers to the total value of all the finished goods and services that…
Q: Which statement best defines the permanent income hypothesis? Consumer spending depends on the…
A: The permanent Income Hypothesis is a theory of spending of the consumers which states that…
Q: Which of the following is true? A. Potential GDP decreases as the price level increases. B. At…
A: Aggregate supply refers to the entire amount of output that companies will create and sell—in other…
Q: Inflationary GDP is the amount by which equilibrium real GDP falls short of the full employment…
A: Inflationary gap is said to exists when the aggregate expenditure exceeds the full employment real…
Q: The government decides that it will cut taxes in an attempt to move the economy out of a severe…
A: Answer TRUE statements
Q: Suppose the government borrows $20 million more next year than this year. a. Draw and fully label a…
A: All A,B, & C part solved below
Q: Which of the following statements are true? Select one or more: a. A recession is a downturn in the…
A: The economics as a study is based upon the basic idea that the resources which are present with the…
Q: Based on the data in the table and graph below, identify the equilibrium GDP: Price Level Real…
A: At equilibrium price, quantity demanded is equal to quantity supplied. At equilibrium level of…
Q: Assume the economy is in a recession, and it is estimated that a change of $800 billion in federal…
A:
Q: National income accounting can best be characterized as: Group of answer choices a microeconomic…
A: The government bookkeeping system that analyses the health of an economy, expected growth, business…
What common rule of thumb do economists use to define a recession?
-
A decline of 5% in GDP
-
A decline of 10% in GDP
-
One quarter of negative GDP growth
-
Two quarters (six months)of negative GDP growth
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Which of the following economic environments would most likely be associated with a recession? Unemployment falling to 30-year low Unemployment increasing from 5% to 9% during the year New businesses opening in record numbers while new housing starts reach a 10-year high GDP growing at an annual rate of 4.2%examine the relationship between total spending by government and consumers in a nation and the location of the countries’ GDP on the business cycle.Mauritius is an island nation off the coast of the African continent in the Indian Ocean. At various points in its history, it has been a Dutch colony, a French colony, and a British colony and it gained its independence in 1968. It has many lovely beaches and is a major destination for parasailing, SCUBA diving, and water skiing. The country generally has good governance and free trade. The population is approximately 1.4MM people. GDP over the last few years has been growing steadily from $25.5B in 2015 to $28B in 2018 (estimated) – which translates into an average growth rate of 3.9%. GDP per capita is $21,600 and the unemployment rate is 6.9%. Assume Mauritius is a small open economy. Further, assume that the world interest rate (r*) and the equilibrium interest rate of Mauritius (r c – the interest rate in Mauritius if it were a closed economy) are equal to each other. a) Imagine now that a new Prime Minister and Parliament are elected in Mauritius. The new administration and…
- The decline in real GDP from $1,000 billion to $500 billion considered a recessionA coincident indicator will change before a recession begins. True or False And whyState both definitions of a recession, the old/traditional definition and the new/modern definition. Then explain why the old definition was replaced
- A futures market trades contracts on the growth rate for nominal GDP. The contract pays $X to the buyer, where X is 100 times the growth rate in nominal GDP from last year to this year. For example, if nominal GDP grows by 1% over last year, the contract pays $100 (1 x 100). Nominal GDP last year was $28,137 billion. Contracts on the futures markets are currently selling for $460. What is the market's prediction for nominal GDP this year? Put your answer in billions. You may round to two decimal places.True or False Any change in spending (C, I, or G) will set off a chain reaction, leading to a multiplied change in GDPIn the context of economic recession, explain monetary and fiscal measures that should be implemented by the government and discuss the impacts of these measures on businesses.
- This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June, 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded a quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Required: Question 1. Clearly explain what Real GDP per capita means.Clearly explain why Real GDP per capita decreased whereas there was still growth in Real GDP for the quarter ending June 2019. Question 2. Given the economic conditions described above, predict how the following key…This case study focuses on the Australian economy in 2019, before the COVID-19 pandemic hit. On 4th September 2019, the Australian Bureau of Statistics (ABS) published Real GDP data for the quarter ending June, 2019. (The reporting of GDP always lags by about 2 months as it takes time to collect and compile data). The data showed that the Australian economy recorded a quarterly growth of 0.5%. However, there was a decrease in Real GDP per capita. Furthermore, Real GDP per capita in June 2019 was lower than it was a year before (June 2018). Overall, while Real GDP still increased, the growth was very weak; the weakest on record since March 2001. (Source: Australian Financial Review and The Guardian). Question 4. Given the economic conditions described above, recommend the appropriate monetary policy that the Reserve Bank of Australia (RBA) should implement.Clearly explain why this type of monetary policy is needed. Question 5. Describe in details the steps the RBA must undertake to…What term is used to describe the total value of all the goods and services produced in a country over a specific time period? A) Gross Domestic Product (GDP) B) Consumer Price Index (CPI) C) Balance of Trade D) Fiscal Deficit
