6. TheGDP gap and the consequences of unemployment On the following graph, the black line shows potential real GDP and the blue line shows actual real GDP for a hypothetical country from 1990 to 2010. Use the green quadrilateral (triangle symbols) to shade the area between actual and potential real GDP that represents the positive GDP gap. Then use the purple quadrilateral (diamond symbols) to shade the area between actual and potential real GDP that represents the negative GDP gap. (s 10 9 Positive GDP Gap (?)

6. TheGDP gap and the consequences of unemployment On the following graph, the black line shows potential real GDP and the blue line shows actual real GDP for a hypothetical country from 1990 to 2010. Use the green quadrilateral (triangle symbols) to shade the area between actual and potential real GDP that represents the positive GDP gap. Then use the purple quadrilateral (diamond symbols) to shade the area between actual and potential real GDP that represents the negative GDP gap. (s 10 9 Positive GDP Gap (?)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Answer the following questions on the basis of the following three sets of data for the country of North Vaudeville: (A) (B) (C) Price Price Level Real GDP Price Level 110 Real GDP Level Real GDP 110 235 285 100 210 100 235 100 260 100 235 95 235 95 235 100 260 90 235 90 210 100 285 a. Which set of data illustrates aggregate supply in the immediate short run in North Vaudeville? (Click to select) ✓ (Click to select) ✓ (Click to select) ✓ b. Assuming no change in hours of work, if real output per hour of work decreases by 5 percent, what will be the new levels of real GDP in the right column of B? Instructions: Enter your answers rounded to 1 decimal place. At a price level of 110: At a price level of 100: At a price level of 95: The short run? The long run? ៖
Consider a simple economy that produces only three goods. Assume that all goods produced are consumed in same period (no inventories). Following table provides information on price and quantity produced and consumed of each of three goods: 2021 2021 2022 2022 Price Quantity Price Quantity Good 1 25 25 40 33 Good 2 45 45 60 35 Good 3 80 50 90 45 Calculate nominal and real GDP for both years using 2021 as the base year. Then calculate inflation rate derived from the GDP deflator and real GDP growth between 2021 and 2022. Calculate Consumer Price Index (CPI) for each year using share of consumption of each product in 2021 as a weight. Then find CPI inflation rate between 2021 and 2022. Is this inflation rate different from GDP deflator inflation rate? Discuss reasons for differences, if any. True, false or uncertain? Above results show that GDP deflator is worse than CPI for measuring changes in average prices in economy. Comment
Give the definition of GDP and explain what items are not included in its calculation and what is the current environment in the USA and Australia? Then, please define unemployment and its measurement. What is the current environment in the USA and Australia? In addition, define inflation and its measurement. What is the current environment in the USA and Australia?
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13. Assume that we compute current dollar GDP for 2021Q2 and find that it rose 2% from 2020Q2. But we also find that general prices rose over the same period by the same amount, 2%. Is the country better off, worse off, or about the same when it comes to output? Explain.
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17 01:27:36 Use the following diagrams for the U.S. economy to answer the next question. AS₁ AS₂ 这 AD Real GDP (1) AS₂ AS, * AD (3) Real GDP (2) NY AD₂ AD₁ Real GDP AD₂ Real GDP AD₁ If the economy is initially at full employment, which of the diagrams best portrays a recession resulting from a decrease in government purchases?
In the circular flow of income and spending, that is, the basic flow of income and spending between households and firms supplemented by the foreign, financial and government sectors... 1. Exports are leakage from the circular flow 2. Savings are injections into the circular flow 3. Imports are injections into the circular flow 4. Taxes are leakages from the circular flow
2. During recessions, central banks tend to cut interest rates. You are interested in understanding the question of how interest rates affect GDP. You look in the data and see that interest rates tend to be low when GDP is low (i.e. the interest rate is pro-cyclical). Why do you think this simple correlation might give a misleading sense of the effect of changes in the interest rate on GDP? How might a model help you answer this question?
4. According to the following figure, what is the GDP? Please show how you computed it. Assume this is a closed economy. Does the "magic* equation hold? Show your work. Figure 2-2 Income (Y = ?) Transfer Payments = $300,000 Households Taxes = $300,000 Capital Market Private Savings = $900,000 Government Government Deficit = $300,000 Business Firms Private Investment = $600,000 Gov't Purchase of G&S = $300,000 Consumption Expenditures = $2,400,000
The table below contains data for a country, which produces only X and Y. The base year is 2010. Year Price of X Q of X Price of Y Q of Y N GDP R GDP Def 2010 $3.00 90 $1.00 150 2011 $4.00 100 $2.00 180 2012 $5.00 120 $3.00 200 1. Refer to Table. In 2011, a. nominal GDP was $420, real GDP was $420 b. nominal GDP was $240, real GDP was $480. c. nominal GDP was $760, real GDP was $420. d. nominal GDP was $760, real GDP was $480. 2. Refer to Table. In 2012, a. GDP deflator was 100.00 b. GDP deflator was 158.33. c. GDP deflator was 214.28. d. GDP deflator was 285.71. 3. Refer to Table. Output growth from 2011 to 2012 a. 80.95%. c. 57.89%. b. 14.28%. d. 16.66%. 4. Refer to Table. Inflation rate from 2011 to 2012 a. 14.28% c. 35.33%. b. 16.66%. d. 58.33%. 5. The labor-force participation rate a.…