MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
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Question
Chapter 9, Problem 6SQ
To determine
The impact over unplanned inventory when the GDP is $6 trillion.
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2. Describe the circular flow of income and expenditures. Explain.
A recession will occur if an economy’s actual GDP ____ its potential GDP.
Â
a.
rises above
Â
b.
equals
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c.
grows faster than
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d.
falls below
4
All of the following are components of aggregate expenditure except
Select one:
a. actual government purchases
b. net export
c. planned investment
Chapter 9 Solutions
MACROECONOMICS FOR TODAY
Ch. 9.4 - Prob. 1YTECh. 9 - Prob. 1SQPCh. 9 - Prob. 2SQPCh. 9 - Prob. 3SQPCh. 9 - Prob. 4SQPCh. 9 - Prob. 5SQPCh. 9 - Prob. 6SQPCh. 9 - Prob. 7SQPCh. 9 - Prob. 8SQPCh. 9 - Prob. 9SQP
Ch. 9 - Prob. 10SQPCh. 9 - Prob. 1SQCh. 9 - Prob. 2SQCh. 9 - Prob. 3SQCh. 9 - Prob. 4SQCh. 9 - Prob. 5SQCh. 9 - Prob. 6SQCh. 9 - Prob. 7SQCh. 9 - Prob. 8SQCh. 9 - Prob. 9SQCh. 9 - Prob. 10SQCh. 9 - Prob. 11SQCh. 9 - Prob. 12SQCh. 9 - Prob. 13SQCh. 9 - Prob. 14SQCh. 9 - Prob. 15SQCh. 9 - Prob. 16SQCh. 9 - Prob. 17SQCh. 9 - Prob. 18SQCh. 9 - Prob. 19SQCh. 9 - Prob. 20SQ
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- Which of these is not true about aggregate demand? a. It includes consumption, investments, government spending, and imports b. It is the amount of total spending on domestic goods and services in an economy. c. It is what economists call total planned expenditure d. It is similar to gross domestic productarrow_forwardPhase in which production, employment and income decline, while inventories increase. 1-depression 2- expansion 3- peak 4-recession 5-trougharrow_forward1. An increase in the desire to save leads to a decrease in gross domestic product. True or false 2. An increase in investment leads to an increase in gross domestic product. Equilibrium occurs when the forces of expansion and contraction are in equilibrium, that is, when savings are greater than the desired investment. True or false 3. The term aggregate expenditure indicates how the aggregate quantity of goods and services demanded depends on the average price level. True or falsearrow_forward
- 1. the aggregate supply curve shows the negative relationship between general price and real GDP. True or false 2. Other things equal, as the number of discouraged workers rises in an economy, the gap between potential and actual real GDP will widen. True or False 3. According to the expedenitures approach, gross domestic product represents the sum of consumption spending, government spending, net exports, and net investments. True or False 4. In a business cycle, a peak marks the end of an expansion and the beginning of a recession. True or False 5. GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and services. True or Faslearrow_forwardGDP in an economy is $8,000 billion. Consumer expenditures are $4,800 billion, government purchases are $1,600 billion, and gross investment is $1,500 billion. Net exports must be $_____ billion. Your Answer: Answer 4arrow_forwardDisposable income ________ when ________. a. decreases; taxes increase b. decreases; transfer payments increase c. increases; government expenditures decrease d. decreases; aggregate income increasesarrow_forward
- Disposable income ________ when ________. a.decreases; taxes increase b.decreases; transfer payments increase c.increases; government expenditures decrease d.decreases; aggregate income increasesarrow_forward7. An increase in the price level results in a(n) because in the quantity of real GDP demanded A) decrease; a higher price level reduces consumption, investment, and net exports. B) increase; a higher price level reduces consumption, investment, and net exports. C) decrease; a higher price level increases consumption, investment, and net exports. D) increase; a higher price level increases consumption, investment, and net exports. 8. The recession of 2007-2009 made many consumers pessimistic about their future incomes. How does this increased pessimism affect the aggregate demand curve? A) This will move the economy up along a stationary aggregate demand curve. B) This will move the economy down along a stationary aggregate demand curve. C) This will shift the aggregate demand curve to the left. D) This will shift the aggregate demand curve to the right.arrow_forwardUrgently need Suppose jane Purchases a $600000 BMW that was produced in Germany. Which of the following describes how this would be recorded in Canadian GDP accounts. Â a. Net Exports Increase $60,000 Â b. Net Exports decrease $60,000 Â c. Investment increases by $60,000 and net exports increase by $60,000 Â d. Consumption increases by $60, 000 and net exports decreases by y$60,000 Â Please fully explain the answer you choose.arrow_forward
- 5. The value of the U.S. dollar is expected to increase versus foreign currencies. Use the Aggregate Expenditure/Income model to: a. Determine whether Aggregate Expenditures will increase or decrease. b. Determine whether Inventories will increase or decrease. c. Determine whether Consumption will increase or decrease. d. Determine whether Real GDP/Income will increase or decrease. Explain Carefully.arrow_forwardList and explain ONE of the shortcomings in using the official GDP as a measure of total production in the economy. List and explain ONE of the three reasons why the aggregate demand curve slopes downward.arrow_forward1. Calculate the disposable income from the following table: Flows in the economy of Classica $10 trillion $10 trillion $7 trillion $1 trillion $2 trillion Total Output (GDP) Total Income Consumption Spending (C) Private Investment (I) Government Purchases (G) Net Taxes (T) Household Savings (S) $1.25 trillion S1.75 trillionarrow_forward
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