The basic cause of business cycle.

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Answer 1

Question

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

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1. Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer. State the condition for a consumer's utility maximizing choice and illustrate graphically. 2. Consider the following table of long-run total costs for three different firms: Quantity Total Cost ($) Firm A Firm B Firm C 1 60 11 21 2 70 24 34 3 80 39 49 4 90 56 66 5 100 75 85 6 110 96 106 7 120 119 129 Does each of these firms experience economies of scale or diseconomies of scale? Explain your answer with necessary calculations.

Riaz has a limited income and consumes only Apple and Bread. His current consumption choice is 3 apples and 5 bread. The price of apple is $3 each, and the price of bread is $2.5 each. The last apple added 5 units to Sadid's utility, while the last bread added 7 units. Is Riaz making the utility-maximizing choice? Why or why not? Do you suggest any adjustment in Riaz's consumption bundle? Why or why not? Give reasons in support of your answer.State the condition for a consumer's utility maximizing choice and illustrate graphically.

Answer 2

Question

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

Answer 6

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

Answer 7

Chapter 16, Problem 1SQP

To determine

The basic cause of business cycle.

Answer 8

Expert Solution & Answer

Explanation of Solution

The basic reason of business cycles according to the generally accepted theories are the changes in the amount of aggregate spending or aggregate demand. The aggregate spending includes the consumption, investment for business, government expenditure, and foreign transactions. The changes in any of these factors result in the business cycle. Consumption (C), investment (I), government expenditure (G) and foreign transactions (X-M), and gross domestic product GDP can be expressed as follows:

GDP=C+I+G+(X−M)

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Real GDP: Real GDP refers to the market value of all the final goods and services produced in an economy during an accounting year, which is measured in the constant prices.

Answer 12

Ch. 16.4 - Prob. 1YTE Ch. 16.4 - Prob. 2YTE Ch. 16.4 - Prob. 3YTE Ch. 16.5 - Prob. 1YTE Ch. 16 - Prob. 1SQP Ch. 16 - Prob. 2SQP Ch. 16 - Prob. 3SQP Ch. 16 - Prob. 4SQP Ch. 16 - Prob. 5SQP Ch. 16 - Prob. 6SQP

The basic cause of business cycle.

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The basic cause of business cycle.

Explanation of Solution

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Chapter 16 Solutions