4. Draw diagrams fora) inflationary gapb) recessionary gapand explain why any economy experiences inflationary and recessionary gaps? (hint:over or underuse of resources)

a) Inflationary Gap:Definition: An "inflationary gap" refers to a situation of an economy when its…

Answered: 4. Draw diagrams for a) inflationary…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. A recessionary gap is the result of the: a.actual level of output falling below the full-employment level of output. b.full-employment level of output falling below the actual level of output. c.full-employment level of output falling below the actual level of consumption.
3. In Keynesian short run aggregate supply curve segment what happens to the price and income (GDP) if the aggregate demand curve shifts outward or inward and why
D Question 36 Assume that an economy's actual output increased over a decade but it experienced deflation throughout that entire time. Which of the following statements is correct? o The country's nominal GDP increased, but nothing can be stated with certainty regarding any change in real GDP. o The country's real GDP increased, and its nominal GDP stayed the same. O The country's real GDP increased, but nothing can be stated with certainty regarding any change in nominal GDP. o The country's real GDP increased, and its nominal GDP decreased. o The country's nominal GDP decreased, but nothing can be stated with certainty regarding any change in real GDP. Question 37 Decreases in the costs of key inputs cause the AS curve to shift to the right. O True O False
6. Which of the following is not correct? * The consumer price index gives economists a way of turning dollar figures into meaningful measures of purchasing power. The consumer price index is used by economists to measure the inflation rate. The consumer price index is used to monitor changes in the cost of living over time The consumer price index is used to measure the quantity of goods and services that the economy is producing.
23) How might big companies ,such as Walmart, avoid contributing to inflation when raising employees wages ?
2. Aggregate supply (AS) denotes the relationship between the __________________ that firmschoose to produce and sell and the _________________, holding the price of inputs fixed.(A) total quantity; price level for output (B) type of goods; input price of raw materials(C) price of goods; number of employees (D) total inputs; types of goods
5 Which of the following is not a reason for the increase in aggregate demand? a. Decrease in imports b. Increase in government expenditure c. Increase in consumption d. None of the options Clear my choice
Explain what would happen to AS or AD (choose AS or AD according to the case) in an economy in the cases below. In your explanation discuss whether AS or AD shifts to the left or right and the conse prices and quantities produced. A. Reduction of taxes B. Discovery of a new technology. C. Increases in unemployment. D. Increases in money supply. (3
i need the answer quickly
Explanation it correctly
4. Using the aggregate demand and supply model, demonstrate the effect of a $100 billion dollar open market sale. (Use a diagram and explain carefully).
7. Determinants of aggregate supply The following graph shows an increase in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar Specifically, the short-run aggregate supply curve shifts to the right from AS, to AS2, causing the quantity of output supplied at a price level of 100 to rise from $200 billion to $250 billion. 200 PRICE LEVEL 175 150 100 76 50 26 O 0 M 400 II 150 200 250 QUANTITY OF OUTPUT AS, Regulations on the firm Human capital Input prices AS 100 350 The following table lists several determinants of short-run aggregate supply. (?) Complete the table by selecting the changes in each scenario necessary to increase short-run aggregate supply. Change Necessary to Increase AS

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4. Draw diagrams for a) inflationary gap b) recessionary gap and explain why any economy experiences inflationary and recessionary gaps? (hint: over or underuse of resources)