MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 10, Problem 8SQ
To determine
The impact of the pessimistic future expectations of the workers.
Expert Solution & Answer
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Students have asked these similar questions
If both aggregate supply and aggregate demand simultaneously increase,
a.
the price level and equilibrium real GDP will both remain unchanged.
b.
the price level will increase, but equilibrium real GDP will decline.
c.
equilibrium real GDP will increase, but we cannot predict what will happen to the price level.
d.
the price level will increase, but we cannot predict what will happen to equilibrium real GDP.
e.
the price level and equilibrium real GDP will both decline.
Optimism
Imagine that the economy is in long-run equilibrium. Then, perhaps because
improved international relations and increased confidence in policy makers, people
become more optimistic about the future and stay this way for some time.
Refer to Optimism. In the short run what happens to the price level and real GDP?
Şelect one:
a.the price level falls and real GDP rises.
b.both the price level and real GDP fall.
c.the price level rises and real GDP falls.
d.both the price level and real GDP rise.
Which of the following leads to a rightward shift in the aggregate demand?
a.
General price level fall
b.
Rise in government spending
c.
General price level rise
d.
Fall in government spending
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
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Similar questions
- Q9 One reason that the aggregate demand curve has a negative slope is because Select one: a. firms produce more when the price rises. b. people buy fewer goods and save more when the price level rises because their real wealth decreases. c. The premise of the question is wrong because the aggregate demand curve has a positive slope. d. people earn more money when output rises.arrow_forwardDetermine whether the events below will cause the aggregate demand curve to shift to the left or to the right. Assume the price level remains constant. a. Government purchases increase by $2 billion. Aggregate demand shifts (Click to select) to the right to the left . b. Real interest rates increase. Aggregate demand shifts (Click to select) to the right to the left . c. Taxes increase. Aggregate demand shifts (Click to select) to the left to the right . d. Aggregate consumption decreases as consumer confidence falls. Aggregate demand shifts (Click to select) to the right to the left .arrow_forwardIf aggregate demand shifts left, then in the short run a. the price level and real GDP both rise. b. the price and real GDP both fall. c. the price level falls and real GDP rises. d. the price level rises and real GDP falls.arrow_forward
- What is the effect of an increase in the price level when the money wage rate remains unchanged? A. Aggregate supply increases. B. Potential GDP increases. C. The quantity of real GDP supplied increases. D. Resource prices increase by the same percentage as the increase in the price level.arrow_forwardUnemployment would decrease and prices would increase if a. aggregate supply shifted left. b. aggregate demand shifted right. c. aggregate supply shifted right. d. aggregate demand shifted left.arrow_forwardSuppose the economy is experiencing a recessionary gap. In the long run, if there is no government intervention, the nominal wages will ______, unemployment will _____, and the price level will _______. A.fall; rise; fall B.fall; fall; fall C.rise; fall; rise D.rise; rise; risearrow_forward
- Someone please answer this question ASAPAn increase in the price level will A. decrease the real money supply and shift the aggregate demand curve. B. change the slope of the aggregate demand curve at each income level. C. increase the real money supply and shift the aggregate demand curve. D. None of the options are correct.arrow_forwardWhat effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects on the equilibrium price level and the level of real output. Assume all other things remain constant. a. The expectation of rapid inflation b. A 10 percent reduction in personal income tax rates c. A sizable increase in labor productivity (with no change in nominal wages) d. A 12 percent increase in nominal wages (with no change in productivity) e. Depreciation in the international value of the dollar.arrow_forwardWhat effects would each of the following have on aggregate demand or aggregate supply? In each case use a diagram to show the expected effects on the equilibrium price level and the level of real output. Assume all other things remain constant.a. A widespread fear of depression on the part of consumers.b. A $2 increase in the excise tax on a pack of cigarettes.c. A reduction in interest rates at each price level.d. A major increase in Federal spending for health care.e. The expectation of rapid inflation.f. The complete disintegration of OPEC, causing oil prices to fall by one-half.g. A 10 percent reduction in personal income tax rates.h. A sizable increase in labor productivity (with no change in nominal wages).i. A 12 percent increase in nominal wages (with no change in productivity).j. Depreciation in the international value of the dollar.arrow_forward
- If the economy is operating way below capacity, an increase in aggregate demand causes a big change in the and small change in Select one: a. aggregate demand; aggregate supply b. price level; output C. output; price level d. aggregate supply; aggregate demandarrow_forwardSuppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is only intermediate range of the aggregate supply curve, then A. Both real GDP and the price level will fall B. With real GDP and the price level will rise C. Real GDP will fall, and the price level will rise D. Real GDP will rise, and the price level will fallarrow_forwardChoose the correct statement: Select one: a.There is a negative relationship between the price level and aggregate demand. b.lf the price level rises, the quantity of real GDP demanded (aggregate expenditure) falls. c.If the price level falls, the quantity of real GDP demanded (aggregate expenditure) rises. d.all of these are correct statementsarrow_forward
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