3. When the economy is in a recession:a. taxreceipts decrease, transfer payments increase, andreal GDP increases.b. both tax receipts andunemployment insurance payments decrease.c.tax receipts increase but unemployment insurancepayments decrease. d. tax receipts decrease butunemployment insurance payments increase.e.both tax receipts and unemployment insurancepayments increase.4. Inflationary and recessionarygaps are closed by self-correcting adjustments thatshift:a. the SRAS curve.b. the LRAS curve.c. theAD curve.d. both the AD curve and LRAS curve.e.both the SRAS curve and the LRAS curve.

The recession refers to deficient demand in the economy, or demand that is not enough in the economy…

Answered: . When the economy is in a recession:a.…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Figure 25-4 45 Potential GDP Real GDP In Figure 25-4, which expenditure level will result in a recessionary gap? O There will be no deflationary gap. Real Expenditures
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6. Over time, increases in Potential GDP are the result of O A. inflation O B. increased government spending O C. lower taxes O D. increases in technology
By increasing the taxes by government, the value of consumption will increase. a. True O b. False
The partial data in the table below are for the economy of Arinaka. Planned investment, government spending, and all taxes are autonomous. You may assume that the MPC, MPS, and MPM are constant. a. Fill in the blanks in table below, Unplanned Investment Y. YD AE $458 $50 $360 $40 $65 $55 $20 See 45 -5 550 600 b. The value of equilibrium income is $ c. If planned investment decreases by $20, the new value of equilibrium income is $
When the exports are less than imports, then there will be ___________. a. Budget surplus b. negative net exports c. positive net exports d. budget deficit
The crowding-out effect is the tendency for a government budget deficit to raise the and investment. O A. price level; increase O B. real interest rate; decrease O C. quantity of output; increase O D. real wage rate; decrease Click to select your answer. 888 :二。 F7 F6
GuideLine Consumption Agg. Demand Consumption 196 56 350 490 National Income 1. Assuming that the marginal propensity to consume (MPC) equals 0.60, the size of the gap facing this economy will be: A. + 56 B. - 56 C. - 14 D. +14 2. The type of the gap is
When the economy goes into a recession, realGDP _________ and unemployment _________.a. rises; risesb. rises; fallsc. falls; risesd. falls; falls
1. If equilibrium national income is higher than the potential income at full- employment, there will be in the economy a.deflationary gap b.recessionary gap c.inflationary gap d. inequality gap

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. When the economy is in a recession:a. tax eceipts decrease, transfer payments increase, and al GDP increases.b. both tax receipts and nemployment insurance payments decrease.c.