Macroeconomics
13th Edition
ISBN: 9781337617390
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 9, Problem 6WNG
To determine
The diagrammatic explanation of a recessionary gap in terms of both institutional
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The graph shows an economy in macroeconomic equilibrium.
Now, three things occur: The world economy goes into an expansion, domestic businesses expect future profits to rise, and the government increases its expenditure on goods and services as international tensions increase.
On the graph, draw one
new curve that shows the combined effect of the three events. Label it.
Draw a point at the new macroeconomic equilibrium.
>>>
Draw only the objects specified in the
question.
The short-run equilibrium output level is
ALL OTHER GOODS (Thousands of units)
The following graph shows two production possibilities frontiers (PPFS) for the economy. The PPF closer to the origin (blue curve) is the economy's
institutional PPF, and the PPF farther from the origin (purple curve) is the economy's physical PPF.
10
Place the grey point (star symbol) on one of the black points (plus symbol) to indicate the state of the economy when it is operating at the short-run
equilibrium described above.
9
8
1
0
0
exists in the labor market of this economy.
Physical PPF
Institutional PPF
1
+
+
+
2
Two PPFs
+
+
3 4 5 6 7
GOOD X (Thousands of units)
and the economy is operating
In time, wages and costs of production will likely
8
9
10
As a result,
State of Economy
(?)
Q1. Explain how macroeconomics studies the economy in aggregate.
Chapter 9 Solutions
Macroeconomics
Ch. 9.1 - Prob. 1STCh. 9.1 - Prob. 2STCh. 9.1 - Prob. 3STCh. 9.2 - Prob. 1STCh. 9.2 - Prob. 2STCh. 9.2 - Prob. 3STCh. 9.3 - Prob. 1STCh. 9.3 - Prob. 2STCh. 9.3 - Prob. 3STCh. 9 - Prob. 1QP
Ch. 9 - Prob. 2QPCh. 9 - Prob. 3QPCh. 9 - Prob. 4QPCh. 9 - Prob. 5QPCh. 9 - Prob. 6QPCh. 9 - Prob. 7QPCh. 9 - Prob. 8QPCh. 9 - Prob. 9QPCh. 9 - Prob. 10QPCh. 9 - Prob. 11QPCh. 9 - Prob. 12QPCh. 9 - Prob. 13QPCh. 9 - Prob. 14QPCh. 9 - Prob. 15QPCh. 9 - Prob. 16QPCh. 9 - Prob. 17QPCh. 9 - Prob. 18QPCh. 9 - Prob. 1WNGCh. 9 - Prob. 2WNGCh. 9 - Prob. 3WNGCh. 9 - Prob. 4WNGCh. 9 - Prob. 5WNGCh. 9 - Prob. 6WNGCh. 9 - Prob. 7WNG
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