. What is the equilibrium rate of real GDP?        $  __ billion   b. If full-employment real GDP is $800 billion, what problem does this economy have? multiple choice This economy has a recessionary gap. This economy has an inflationary gap. This economy does not have a problem.   c. How large is the real GDP gap?        $ __  billion

Q: The most likely source of an increase in investment is a. Interest rates that are lower b.…

A: "Investment is a kind of good which is not consumed today but used in future in order to generate…

Q: a. Draw the circular flow of spending and income. Put a proper label on every box and flow. b.…

A: Circular flow of income is the flow of income from one sector to other sector.  When economy is…

Q: Potential 450 GDP - C+l+G+X=IM) F 4,000 5,000 6,000 Real GDP (billions of dollars per year) In…

A: Answer to the question is as follows :

Q: K During 2009, the Federal Reserve was easing monetary policy in an attempt to boost the economy.…

A: GDP refers to the total monetary value of all final goods and services that a nation produces in its…

Q: ← During 2009, the Federal Reserve was easing monetary policy in an attempt to boost the economy.…

A: GDP basically refers to the total monetary value of all final goods and services that a nation…

Q: When the government cuts the income tax rate, the real wage rate received by workers potential GDP…

A: A tax is a mandatory payment to the government. The tax amount is used by the government for public…

Q: If labor supply decreases, what will happen to the real wage rate, employment, and real output,…

A: Labour supply refers to the amount of time and effort that individuals are willing and able to…

Q: Phase in which production, employment and income decline, while inventories increase. 1-depression…

A: There are four phases of business cycle, recession, expansion, peak and trough

Q: Match the term to the definition Occurs when equilibrium GDP is greater than full employment GDP…

A: A decrease in the average price level of all goods and services over time in a particular economy is…

Q: Which methods do economists employ in order to calculate the market value of all final goods and…

A: Economists are professionals who study and analyze economic systems, behavior, and phenomena. They…

Q: What is the quantity of real GDP produced if the real wage rate is at the​ full-employment…

A: Real GDP is inflation adjusted money value of all final goods and services produced in an economy.

Q: ow is it possible for the economy to have an inflationary gap? a. GDP is falling at full…

A: Answer to the question is as follows:

Q: When there is a recessionary gap: a. Employment exceeds full employment. b. Employment equals full…

A: Gross domestic product is the value of final goods and services produced in the economy within a…

Q: If taxes decreases, the likely impact on an economy isa decrease in real GDP, decrease in…

A:

Q: Real interest rate (percent per year) SLF1 b SLFO SLF2 Loanable funds (trillions of 2009 dollars) In…

A: In an economy the rate of interest determines the price at which borrowers and savers agree to…

Q: Potential GDP 450 C+I+G+X-IM) E T 4,000 5,000 6,000 Real GDP (billions of dollars per year) In…

A: When there is an excess of total disposable income above the value of available items at a specific…

Q: For the economy as a whole Income must be more than expenditures. Select one: a. False b. True

A: For an economy, since total injections into the circular flow is equal to total leakages from the…

Q: Real Income (Y) Real GDP Potential GDP T1 T2 T3 T4 T5 Years (a) Based on the given business cycle…

A: Economic recession refers to a fall in the economic activity in an economy. This lower economic…

Q: Disposable income ________ when ________. a. decreases; taxes increase b. decreases; transfer…

A: DISPOSABLE INCOME IS A NET INCOME , IT IS THE AMOUNT LEFT OVER AFTER TAX. IT IS ALSO KNOWNS AS…

Q: What impact does full employment have on the economy?

A: We can say that When all the labor resources in an economy are utilized in an optimum manner or in…

Q: TRUE OR FALSE WITH REASON. 1. In a recessionary gap, the Real GDP that the economy is producing is…

A: In a recessionary gap, the Real GDP that the economy is producing is lesser than Natural Real GDP.…

Q: shifts the IS curve to the right. Select one: a. A decrease in government spending b. A decrease in…

A: IS curve refers to the curve that depicts the position of the goods market. It is a downward-sloping…

Q: On a diagram, demonstrate the effects of (a) a fall in investment and (b) a fall in the money…

A: Public expenditure refers to that component  of  aggregate demand which is influenced by the…

Q: (22) Assume that the economy begins in long-run equilibrium and that the federal reserve decides to…

A: (22) Open Market Operations include buying and selling of government securities in order to alter…

Q: Suppose the real GDP in an economy is currently $320 billion, C is $160 billion, I is $50 billion, G…

A: When the total expenditure meets the real GDP value, the economy is said to be in equilibrium. The…

Q: Question 1. Use the Keynesian cross to predict the impact on equilibrium GDP of a. An increase in…

A: Keynes argued that a country's national income is determined by two major elements. Aggregate Supply…

Q: Explain the concept of the circular flow of the income in the economy.

A: The circular flow of the expenditure and the income in known as a procedure whereby the expenditure…

Q: 5. The value of the U.S. dollar is expected to increase versus foreign currencies. Use the Aggregate…

A: The value of currency determines the rate of interest. The rise in the rate of interest causes a…

Q: Discuss characteristics of an economy that helps itself correct from a recessionary gap.

A: Potential GDP is the GDP that an economy can produce, given all its resources are at full employment…

Q: Describe the economy's output gap. The economy has A. an inflationary gap of $500 billion B. neither…

A: The output gap in an economy is a measure of the difference between the actual output of an economy…

Q: the economy is self-regulating and in a recessionary gap, what happens?   a. Wages rise, the SRAS…

A: Recessionary gap is a monetary term that alludes to a circumstance where the real GDP is not as much…

Q: 01

A: An inflationary gap occurs when the actual GDP of a country exceeds the potential full-employment…

Q: a. If the government does not take any policy actions, then, in 2021, the value of real GDP will be…

A: Real GDP, or real gross domestic product, is a measure of a country's economic output adjusted for…

Q: examples for the determinants of the consumption element of Aggregate Demand. (Examples are crucial…

A: Consumption is one of the elements of the aggregate demand of a country. It further includes various…

Q: If the government enacts an expansionary policy during a time of full employment, ______.   A.…

A: Long run aggregate supply (LRAS) curve demonstrates the full employment level of output (or natural…

Q: Figure 25-4 45 Potential GDP Real GDP In Figure 25-4, if the economy is in a recessionary gap, what…

A: Recessionary gap means Real GDP is less than potential GDP.

Q: 2. The real wage is the return to labor measured in: O a. dollars. b. units of output. O c. units of…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the level of consumption and investment? Do consumption, investment and government…

A: The goods market equilibrium is at the point where the Y that is income is equal to the sum of…

Q: Explain why the NBER reported that the 2008 recession began before real GDP had fallen for two…

A: To determine the real GDP the NBER committee calculated the the real GDP and the real GDI (gross…

Q: When the economy goes into a recession. real GOP---- and unemployment ___ .a.  rises, risesb. rises,…

A: A recession refers to a period of economic contraction during which companies experience weaker…

Q: Govt purchases increase by $87b and the MPC = .89. By how much will RGDP eventually increase? (round…

A: Increase in Govt. purchases or spending = $87 billion MPC = 0.89

Q: You are shown the statements below. Which of the following is/are true? Statement 1: During a…

A: Meaning of Business Cycle: The term business cycle refers to the measurement of whether an economy…

Q: The given table shows hypothetical data for five economies. Real GDP is measured in millions of…

A: Real GDP (Gross Domestic Product) is a measure of the total value of all goods and services produced…

Q: The economy is in long run equilibrium. There is a positive AD shock in the short run, the…

A: The AD shock is the unexpected change or shift in AD curve. It can be positive or negative. A…

Q: Which of these is not true about aggregate demand? a. It includes consumption, investments,…

A: Which of these is not true about aggregate demand? The answer is - b. It is the amount of total…

Q: if government spending and the price level increase, then a. the interest rate increases,…

A: Government spending is the total amount of money that a government spends on goods and services,…

Q: The French economist Jean-Baptiste Say trans-  formed the equality of total output and total…

A: OPTION C - Supply creates its own demand This is called the Say's Law.  It says that if a good is…