According to Keynes’ Law... Group of answer choices The total demand tends to rise above the total supply capacity in the short run which leads to recessions The total demand always equals the total supply capacity in the short run. The total demand for products determine the level of gross domestic product and may not equal the supply capacity of the economy in the short run. The total supply of products determines the level of gross domestic product and the level of demand in the economy in the long run.

Q: How might the following events affect the real gross domestic product (GDP) and what would happen to…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: An economy is currently in equilibrium. The following figures refer to elements in its national…

A: The market value of all commodities and services produced in the economy over a certain time period…

Q: Consider that the macroeconomy is hit by aftershocks. Exports decrease by $40 billion and imports…

A: Since you have posted multiple questions, we will provide the solution only to the first question as…

Q: Answer the following questions, which relate to the aggregate expenditures model: Instructions:…

A: GDP (gross domestic product) is records of the market value of total goods and service produced…

Q: Assume that the economy is now governed by a government and begins trading with other economies. The…

A: Equilibrium in the market occurs where income is equal to aggregate expenditure.

Q: based on macroeconomic theory, one of the following four answers is a correct description of the…

A: The expenditure multiplier depicts the effects of changing autonomous spending on overall spending…

Q: Which of the following is true of the change in the quantity of aggregate output demanded? a.The…

A: Aggregate output demand is the sum of consumption, investment, government spending, and net exports.…

Q: Consider the circular flow of expenditure and income in the Canadian economy. Which of the following…

A: The circular flow of income and expenditure basically refers to the mechanism through which an…

Q: Use the point drawing tool to plot and label the equilibrium level of income. Carefully follow the…

A: Aggregate expenditure function is derived  from summation of the consumption expenditure, investment…

Q: a) About Country A, what is your estimate of the country's marginal propensity to consume (MPC)…

A: Given,

Q: Use the information below to calculate the equilibrium level of GDP. C=500+0.5Yd, I=300, G=2000,…

A: GDP refers to the monetary value of all final goods and services that produced in a nation's…

Q: What is income-expenditure equilibrium? Derive aggregate demand curve from income expenditure…

A: Aggregate demand refers to the sum total of all individual goods and services demanded.The aggregate…

Q: Based on the assumptions of the aggregate expenditure model, the equilibrium level of aggregate…

A: GDP, gross domestic product is the value of final goods and services produced in the economy within…

Q: b. Business taxes increase. Planned Aggregate Expenditure (PAE billions $) PAE = Y PAE, Aggregate…

A: The macroeconomic policies and factors are clearly responsible for estimating the several features…

Q: Q3 In a simple macroeconomic model, the value of national income Y may be found by solving the…

A: * SOLUTION :-  * (A) * The equilibrium level of national income = 1850 * Explanation: Y = C + I + G…

Q: Explain, in detail, how the adjustment to macroeconomic equilibrium occurs when spending is less…

A: Macroeconomic equilibrium refers to a point on the graph of aggregate demand and aggregate supply…

Q: 7. Deriving and exploring the total expenditures curve The following graph shows total production…

A: Gross domestic product is the summation of a country's final goods and services. An increase in GDP…

Q: According to Keynes’ Law... A) The total demand for products determine the level of gross domestic…

A: According to Keynes’ Law.. The correct option is: option (A) The total demand for products determine…

Q: Suppose an economy is operating at point A on the graph showing aggregate demand. A decrease in the…

A: Aggregate demand curve states the inverse relationship between the price level and aggregate output.…

Q: Which of the following is true: a) at equilibrium aggregate expenditure is greater than gross…

A: Aggregate expenditure refers to the aggregate sum of the total spending in an economy over a period,…

Q: Assume the following model of the expenditure sector:  S=C+I+G+Nx TR=100 C=420+(4/5)YD I=160 G=180…

A: In the expenditure model, Y = C + I + G + NX , since the values are given: Y= 420 + (4/5)[Y –(1/6)Y…

Q: From the information below calculate aggregate demand;   Consumption (C) = $200 + 0.6Y Investment…

A: Aggregate demand means an economic measure of the whole of all definitive services and goods…

Q: “If taxes and government spending are increased by the same amount, there will be no effect on…

A: Answer: FALSE For example Assume the government invests an additional $100 million and the MPC is…

Q: Calculate total GDP for this economy given the following components of supply. Round your answer to…

A: GDP's supply side components are durable goods, non-durable goods, services, structures, and changes…

Q: According to Keynes' Law... The total demand for products determine the level of gross domestic…

A: Keynesian economics refers to the macroeconomic theories which involve total spending in the economy…

Q: ich of the following components of consumption spending typically sees the largest decline in demand…

A: As we know A recession is a time of financial compression rather than development in it. During such…

Q: Which of the following correctly describes how a decrease in the price level affects consumption…

A: Decline in price level means decline in the prices of goods and services.  It means that value of…

Q: Evaluate the following statement: Even if the prices of a large number of goods and services in the…

A: Gross Domestic Product (GDP) refers to the value of goods and services that are produced inside a…

Q: Name two macroeconomic variables that decline when the economy goes into a recession. Name one…

A: Recession:Recession refers to the situation of a widespread decline in spending which leads to an…