1. If equilibrium national income is higher than the potential income at full-employment, there will bein the economya.deflationary gapb.recessionary gapc.inflationary gapd. inequality gap

The objective of the question is to identify the type of economic gap that occurs when the…

Answered: 1. If equilibrium national income is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 18 Choose the correct match of each of the following economic concepts: Unemployment could persist for a long period of time A. - Explains the positive relation between national income and investment . Aggregate demand determines the level of production Is just another name for net investment D. Break-even Point E The percentage saved from any increase in national income The F. average propensity to consume equals 1 Marginal Efficiency of Investment The percentage of national income being spent on consumer goods The Classical Theory - Wages and prices are flexible in both directions according to market conditions Marginal Propensity to Save (MPS) The average propensity to consume equals zero The change in national income divided by the change in savings Explains the negative relation between interest rate and investment The average propensity to save equals 1
H10. the plot of national income and price represents aggregated supply true false
7. Govt purchases increase by $87b and the MPC = .89. By how much will RGDP eventually increase? (round answer to two decimal places)
1
The given table shows hypothetical data for five economies. Real GDP is measured in millions of dollars. Complete parts (a) through (e). a. Fill in the missing data in the table. Which economies have an inflationary gap? (Select all that apply.) A. Economy 5 B. Economy 1 C. Economy 2 D. Economy 3 E. Economy 4 Which economies have a recessionary gap? (Select all that apply.) A. Economy 4 B. Economy 5 C. Economy 3 D. Economy 2 E. Economy 1 b. Which economies likely have the most unused capacity? Explain. likely have the most unused capacity, because in these economies c. In which economies are labour and other factors of production in excess demand? (Select all that apply.) A. Economy 5 B. Economy 1 C. Economy 2 D. Economy 3 E. Economy 4 d. Explain why the rate of change of nominal wages is high in Economies 1 and 2, and low in Economies 3 and 5. pressures on wages and shifts of the In the adjustment process, or quickly as the opposite pressures and shifts during e. Assuming that labour…
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 product
Explain any two causes of deflationary gap in an economy?
8. In the economy, we found a recessionary gap of 50, relative to potential output of 4,800. Suppose that, in this economy, the natural rate of unemployment rate is 5%. What will the actual unemployment rate be after the recessionary gap appears?"
The French economist Jean-Baptiste Say trans- formed the equality of total output and total spending into a law that can be expressed asa. unemployment is not possible in the short run.b. demand and supply are never equal.c. supply creates its own demand.d. demand creates its own supply.
. Find the equilibrium level of national income in the basic Keynesian macroeconomic model: Y=C+I+G C=20+0.75Yd Yd=(1-t)Y
Imagine our economy is in the situation which is the supply of goods equal the demand of the goods if the GDP output of the economy increase what was the new equilbrium point for goods market explain in detail

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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