Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Chapter 8, Problem 3RQ
To determine
The impact of
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What is the definition of price level?
Diagrammatically represent the effect on the price level and real GDP in the short run of each of the following :
a. An increase in wealth
b.an increase in wage rates
C. An increase in labour productivity
Explain how real GDP is determined when the price level is fixed.
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Macroeconomics (Fourth Edition)
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- If the price level in the economy goes up while all other factors affecting the economy remains the same,briefly explain how this increase in P will reduce C, I and NX.arrow_forwardIf firms become more optimistic about the future of the economy and, at the same time, innovation in 3-D printing makes most workers more productive,what is the combined effect on output, employment, and the price-level?arrow_forwardwhat is the equilibrium price level?arrow_forward
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- The U.S. state of Maryland banned use of hydraulic fracturing to extract oil and gas in 2017. How does the resulting increase in oil prices affect output, employment, and the price level?arrow_forwardAs a result of the change in real GDP, will an increase in the interest rate on bank loans lead to an expansion or a recession? What will happen to the unemployment rate? What will happen to the price level?arrow_forwardThe index of the general price level can be seen in two distinct ways. What are these two alternative ways of viewing the index?arrow_forward
- Suppose the people of Canada has reduced their spending on goods and services from the United States. What will be the effect on real GDP and the price level in the short run? In the long run? Show your results graphically.arrow_forwardWhat effect would an increase in aggregate demand have on price level and GDP?arrow_forwardSuppose the price level falls. The result is thatarrow_forward
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