MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 10SQ
To determine
The indication of the aggregate demand curve.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Activity
• Discuss which policies can be implemented in the
following situations along with the justifications.
• To control the inflation rate
• To reduce the income distribution disparities
• To increase the investments in construction sector
• To encourage the individuals to spend more on
consumption
• To enhance the government revenue
To control imports
To reduce unemployment
Use the World View to answer the questions. Be sure to spell the country correctly.
WORLD VIEW
Comparative Macro Performance
The performance of the U.S. economy in the 2000s was better than that of most developed economies. Japan had the greatest success in restraining inflation (0.4 percent) but suffered from sluggish growth (0.7 percent). The United States grew faster and also experienced less unemployment than most European countries.
Performance, 2000–2018
U.S.
Japan
Germany
United Kingdom
France
Canada
Real growth (annual average)
1.8
0.7
1.3
1.5
1.1
1.9
Inflation (annual average)
2.2
0.4
1.4
2.0
1.4
1.9
Unemployment (annual average)
6.1
4.3
6.8
5.9
9.2
7.1
Source: International Monetary Fund and OECD.
a, Which country was best at controlling inflation?
b. Which country did the best job with providing jobs for their citizens?
c. Which country had the worst misery index?
d. Which country had the fastest growth?
e. Which country had the slowest growth
Suppose you are the governor of Country A and you have observed some changes in your country. Identify the likely impact on Country A with the economic concepts we have discussed in this course.
i. Establishment of more labour unions in many industries in the country ii. A widespread of global pandemiciii. An abolishment of minimum wage lawiv. Much more educated workers than a decade before
How would the unemployment rate be affected in each of the above cases? Identify the specific type of unemployment (frictional, structural or cyclical unemployment) affected in each case.
i. An earthquake destroying many factories and roads in the country ii. A removal of restrictions on foreign workers working in the country iii. Reaching a trade agreement with many other countriesiv. An occurrence of hyperinflation in the country
How would the long run economic growth of the country be affected in each of the above cases? Briefly explain your answers.
Chapter 10 Solutions
MACROECONOMICS FOR TODAY
Ch. 10.7 - Prob. 1YTECh. 10.A - Prob. 1SQPCh. 10.A - Prob. 2SQPCh. 10.A - Prob. 3SQPCh. 10.A - Prob. 4SQPCh. 10.A - Prob. 5SQPCh. 10.A - Prob. 6SQPCh. 10.A - Prob. 1SQCh. 10.A - Prob. 2SQCh. 10.A - Prob. 3SQ
Ch. 10.A - Prob. 4SQCh. 10.A - Prob. 5SQCh. 10.A - Prob. 6SQCh. 10.A - Prob. 7SQCh. 10.A - Prob. 8SQCh. 10.A - Prob. 9SQCh. 10.A - Prob. 10SQCh. 10.A - Prob. 11SQCh. 10.A - Prob. 12SQCh. 10.A - Prob. 13SQCh. 10.A - Prob. 14SQCh. 10.A - Prob. 15SQCh. 10.A - Prob. 16SQCh. 10.A - Prob. 17SQCh. 10.A - Prob. 18SQCh. 10.A - Prob. 19SQCh. 10.A - Prob. 20SQCh. 10 - Prob. 1SQPCh. 10 - Prob. 2SQPCh. 10 - Prob. 3SQPCh. 10 - Prob. 4SQPCh. 10 - Prob. 5SQPCh. 10 - Prob. 6SQPCh. 10 - Prob. 7SQPCh. 10 - Prob. 8SQPCh. 10 - Prob. 9SQPCh. 10 - Prob. 10SQPCh. 10 - Prob. 11SQPCh. 10 - Prob. 1SQCh. 10 - Prob. 2SQCh. 10 - Prob. 3SQCh. 10 - Prob. 4SQCh. 10 - Prob. 5SQCh. 10 - Prob. 6SQCh. 10 - Prob. 7SQCh. 10 - Prob. 8SQCh. 10 - Prob. 9SQCh. 10 - Prob. 10SQCh. 10 - Prob. 11SQCh. 10 - Prob. 12SQCh. 10 - Prob. 13SQCh. 10 - Prob. 14SQCh. 10 - Prob. 15SQCh. 10 - Prob. 16SQCh. 10 - Prob. 17SQCh. 10 - Prob. 18SQCh. 10 - Prob. 19SQCh. 10 - Prob. 20SQ
Knowledge Booster
Similar questions
- Which of the following will NOT cause inflation to increase in home country? An increase in the aggregate demand An increase in the cost of production An increase in the unemployment rate An increase in the prices of imported goodsarrow_forwardReduction in the levels of structural unemployment have the effect of A. Reducing the level of aggregate demand. B. Increasing the level of frictional unemployment (since if structural unemployment falls frictional unemployment must rise to keep the natural rate unchanged) C. Reducing the long-run aggregate supply but increasing short-run aggregate supply D. Increasing the long-run aggregate supplyarrow_forwardA worker who is laid off because his or her company chooses to move from Wisconsin to North Carolina is counted as ________ unemployment. frictional cyclical structural waitarrow_forward
- ________ of unemployment during ________ make it easier for workers to ________ wages. High levels; a recession; negotiate higher Low levels; an expansion; negotiate higher Low levels; a recession; accept lower High levels; an expansion; accept lowerarrow_forwardConsider the following shocks: A. The government cuts the personal income tax B. Firms expect a recession in the coming years C. A country the US trades with experiences an economic slowdown D. The government cuts unemployment benefits E. The central bank decides to cut the money supply F. US dollar appreciates against other currencies G. The government cuts its spending on infrastructure H. The government of a country the US trades with introduces tariffs on US-produced goods I. There is a stock market crash. For each shock: 1) explain which component of aggregate expenditure would the shock affect and why; 2) Illustrate in the (Y, P) coordinates how the shock would affect the position of the AD curve 3) explain how the shock would affect equilibrium output and the price level in the economy according to the classical school of economic thought (aka the long run approach)arrow_forwardScenario 1: An increase in the unemployment rate to 7.4% has occurred. Inflation has increased causing a decline in consumer spending. Exports have declined by more than $4 billion. This has caused a decrease in GDP by 3.7%.arrow_forward
- Which among the following would be an indicator suggesting recession a. Discretionary purchases, like sales of new automobiles, fall dramatically b. Sales of new homes fall c. The unemployment rate rises significantly and is expected to keep rising d. 90-day T-bills rise and stay above 10- year Treasuries e. Inflation rises and is expected to keep risingarrow_forwardIn the long run, as a result of the economic prosperity abroad, the price level the quantity of output the natural level of output, and the unemployment rate the natural rate of unemployment.arrow_forwardGraphically show the impact of a tax cut shock. Include all three markets: Labor, Product, Capital. Start with an initial steady state. Show the impact of a shock in the initial market. Next show the propagation mechanism--how it carries over into the other two markets. Show at least one set of the feedback loop, Show the new steady state.arrow_forward
- Classify each of the following as a supply shock or a demand shock. Use a graph to show the effects on inflation and output in the short run and in the long run. Financial frictions increase. Steel workers go on strike for four weeks. Households and firms become more optimistic about the economy. Favorable weather produces a record crop of soybeans and cotton in the Midwest.arrow_forwardMacroeconomists differ from microeconomists because macroeconomists focus on the study of _______.inflation, unemployment, and GDP than in individual markets.market prices than the cost of living.inflation in the United States rather than inflation in Puerto Rico.tariffs than global trade.arrow_forwardPhase in which employment rises, and production and income increase. 1-depression 2- expansion 3- peak 4-recession 5-trougharrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
