Principles of Macroeconomics (11th Edition)
11th Edition
ISBN: 9780133023671
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 5, Problem 3P
To determine
Changes in output and
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When a recession begins and ends is determined by the Business Cycle Dating Committee (chaired by our textbook author Robert Hall) within the National Bureau of Economic Research (NBER). The NBER concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this current pandemic-driven episode in the nation as a recession.
True
False
Which of the below did NOT happen during the Great Recession of Dec. 2007 - June 2009?
Group of answer choices
Christina Romer, the then chair of President Obama's Council of Economic Advisers estimated that household wealth increased by 5% between December 2007 and December 2008.
Banks had made subprime mortgage loans to overly leaveraged American families who could not make their mortgage payments.
The American Recovery and Reinvestment Act (ARRA), or President Obama's Stimulus Bill was enacted in 2009.
The investment bank, Lehman Brothers, declared bankruptcy leaving all of its creditors high and dry.
Suppose the economy of a hypothetical country has reached its long-run macroeconomic equilibrium when each of the following aggregate demand shocks occurs.
The economy of a hypothetical country has been stable for two or three years with very low unemployment. Wages have been gradually increasing during this time. Now stock market prices begin significant increases, causing peoples’ investments, such as their retirement accounts and other investments, to increase in value. People feel very good about the future and use their new-found wealth to buy things that they had been hesitant to purchase in the past. Describe, in a short essay inserted below these questions, how the economic situation will change and how the government could best respond to these changes. Include detailed answers to the following questions in your essay:
What kind of economic gap will start to occur (inflationary or recessionary)?
What kind of fiscal policy might be helpful to stabilize the economy…
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Principles of Macroeconomics (11th Edition)
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