1. Suppose nominal GDP rose from $500 billion to $600 billion while theprice index increased from 125 to 150. Real GDPremained constant.increased.c)decreased.8. If both nominal GDP and the price index are rising, is evident thata)b)c)d)real GDP is constant.real GDP is rising.real GDP is declining.no conclusion can be drawn about real GDP.UShp

answer-(d) No conclusion can be drawn about real GDP

Answered: 8. If both nominal GDP and the price…

8. If both nominal GDP and the price index are rising, is evident that a) b) c) d) real GDP is constant. real GDP is rising. real GDP is declining. no conclusion can be drawn about real GDP.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter9: Aggregate Demand

Section: Chapter Questions

Problem 4.9P

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illustrates and how it is related to the aggregate demand curve. 3. Figure 11.8 shows the aggregate expenditure curve when the price level is 110. When the price level rises to 120, the AE curve shifts vertically downwards from AE, by $1 trillion. When the price level falls to 100, the AE curve shifts vertically upwards from AE, by $1 trillion. Figure 11.8: FIGURE 11.8 Short Answer Problem 10 (a) 8 Price level (GDP deflator) Aggregate planned expendit (trillions o FIGURE 11.9 Short Answer Problem 10 (b) 130 a. Draw two new AE curves in figure 11.8 for the price levels of 100 and 120. What are the equilibrium levels of aggregate expenditures for these two price levels? Label as 'b' the equilibrium point when the price level is 100 and 'c' as price level is 120. 120 b. Use figure 11.8 to obtain three points 'a', 'b' and 'c' on the aggregate demand curve. Plot these three points on figure 11.9. Assume that the aggregate demand curve is linear and draw the AD curve on figure 11.9. Figure…
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