Macroeconomics
10th Edition
ISBN: 9780134896441
Author: ABEL, Andrew B., BERNANKE, Ben, CROUSHORE, Dean Darrell
Publisher: PEARSON
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Question
Chapter 8, Problem 2AP
To determine
Reason for fall in expenditure of durable good more compared to non-durable good.
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What are the key indicators and factors that contribute to the onset of a recession in an economy?
Recessions hit parts of the economy differently.
What part of the economy is usually hurt the most during a recession?
Durable goods.
Non-durable goods
Consumer non-durable goods
Consumer services like dentist appointments
What happens to each sector of the economy when recession occurs?
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- recognize why economists believe that economic problems such as “shocks” and “sticky prices” are responsible for short-run fluctuations in GDP;arrow_forwardSuppose most business executives expect a slowdown in the economy (slower sales growth for their firm). How might that affect the economy?arrow_forwardWhy is a slow growing economy a problem during a recession?arrow_forward
- A $300 million decrease in investment spending will increase real GDP by more than $300 million. Is this a true statement? What is the relationship between investment spending and the GDP? I think that investment spending goes directly into the economy so I believe the answer to be true. But I am not sure.arrow_forwardIf you read in the newspaper that the United States’ 2015 real GDP declined while nominal GDP for 2015 grew, how could you explain this?arrow_forwardWhat factors influence the demand for non-durable goods during an economic recession?arrow_forward
- A decline in the interest rate is unlikely to have no effect on GDP? Agree or disagree? Why?arrow_forwardConsider the following hypothetical data for the U.S. economy in 2018 (all amounts are in trillions of dollars; see pages 179–182).Consumption 11.0 Indirect business taxes .8 Depreciation 1.3 Government spending 3.8 Imports 2.7 Gross private domestic investment 4.0 Exports 2.5e. Based on the data, what is GDP? NDP? NI?f. Suppose that in 2019, exports fall to $2.3 trillion, imports rise to $2.85 trillion, and gross private domestic investment falls to $3.25 trillion. What will GDP be in 2019, assuming that other values do not change between 2018 and 2019?arrow_forwardDefine what economists mean when they use the word: “recession”?arrow_forward
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