Exploring Macroeconomics
8th Edition
ISBN: 9781544337722
Author: Robert L. Sexton
Publisher: SAGE Publications, Inc
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Chapter 14, Problem 11P
To determine
To explain:
The effect on aggregate
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Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession.
Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following:
Current price level, labeled PL1
Current output, labelled Y1
Assume that Braveland, a major trading partner of Macroland, enters into a recession.
Explain the effect on Macroland exports to Braveland
On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland.
How would this change in real output in Macroland affect unemployment in Macroland?
Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro.
Explain whether the euro will appreciate, depreciate, or remain…
Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession.
Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following:
Current price level, labeled PL1
Current output, labelled Y1
Assume that Braveland, a major trading partner of Macroland, enters into a recession.
Explain the effect on Macroland exports to Braveland
On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland.
How would this change in real output in Macroland affect unemployment in Macroland?
Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro.
Explain whether the euro will appreciate, depreciate, or remain…
Macroland is recognized as a high-income economy by the World Bank. The country of Macroland is now in a recession.
Using a correctly labeled graph of the long run aggregate supply, short run aggregate supply, and aggregate demand curves and show each of the following:
Current price level, labeled PL1
Current output, labelled Y1
Assume that Braveland, a major trading partner of Macroland, enters into a recession.
Explain the effect on Macroland exports to Braveland
On your graph in part (a) above, show the effect of the change identified in part (b) (i) above on real output in Macroland.
How would this change in real output in Macroland affect unemployment in Macroland?
Assume the recession in Braveland causes a decrease in the demand for Macroland dollars in the foreign exchange market. Braveland’s currency is the euro.
Explain whether the euro will appreciate, depreciate, or remain…
Chapter 14 Solutions
Exploring Macroeconomics
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Similar questions
- Suppose after five years of sluggish growth, the economy of the European Union picks up speed. What would be the likely impact on the U.S. trade balance, GDP, and employment?arrow_forwardHow an exogenous increase of Mexico’s GDP will influence U.S. aggregate demand and GDP.arrow_forwardWhat change does recession has on the price and output level when the change in aggregate demand is less than change in aggregate supply ?arrow_forward
- What change does recession has on the price and output level when the change in aggregate demand is more than change in aggregate supply ?arrow_forwardWhich would most likely increase aggregate supply? An increase in the prices of imported products An increase in productivity A decrease in business subsidies A decrease in personal taxesarrow_forwardWhat kind of change would happen to aggregate demand, aggregate supply, and real GDP. if foreign countries purchase an unusually large number of U. S. manufactured passenger and military airplanes.arrow_forward
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