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: Suppose that business executives are very optimistic, and they raise their investment spending. What…

A: Keynesianism, due to its potential to ease economic downturns through government involvement, gained…

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: How changes in government expenditure and tax programs through the setting of the government's…

A: Gross domestic product is the final combination of goods and services in a country. GDP is an…

Q: Potential 450 GDP - C+l+G+X=IM) F 4,000 5,000 6,000 Real GDP (billions of dollars per year) In…

A: Answer to the question is as follows :

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: Draw and interpret a “Keynsian cross” graph for the following situations. See the model in ch. 12.…

A: Keynesian cross It expresses a relationship between total spending and production. It shows how, as…

Q: י The following diagram presents a circular-flow model of a simple economy. The outer set of arrows…

A: Based on this model, households earn income when  firms purchase factors of production (labor) in…

Q: The relationship between businesses and households determines how income and output flow through the…

A: "Gross domestic product or GDP indicates the market or monetary value of all the final commodities…

Q: Y=E Autonomous expenditure = 3500 Equilibrium income = 9800 Full employment level of income is =…

A: Y=E Autonomous expenditure = 3500 Equilibrium income = 9800 Full employment level of income is =…

Q: The following table shows some information on a hypothetical economy. The table lists real GDP,…

A: Real GDPCIGX-MAEUnplanned InventoryDirection of Real GDP and…

Q: Referring to this table, calculate the marginal propensity to consume. Type your response Output…

A: Marginal propensity to consume is a measure of change in consumption because of change in income or…

Q: Which methods do economists employ in order to calculate the market value of all final goods and…

A: Economists are professionals who study and analyze economic systems, behavior, and phenomena. They…

Q: An economy is described by the following equations: C= 2,000 + 0.75 (Y – T) Ip= 900 G= 2,000 NX=…

A: Autonomous Expenditure is summation of spending by the all sectors. i.e.  Autonomous Expenditure = C…

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: (trillions of dollars) 45 AE Real GDP, Y (trillions of dollars) (aggregate income-aggregate output)

A: It can be defined as a tool of macroeconomics that help measure the overall activity in an economy.…

Q: Suppose the real GDP in an economy is currently $320 billion, C is $160 billion, I is $50 billion, G…

A: When the total expenditure meets the real GDP value, the economy is said to be in equilibrium. The…

Q: Fill in the table below to answer the next five questions. Assume that l", G and NX are fixed.…

A: Aggregate equilibrium condition is achieved when aggregate demand equals income.AD = C +  I + G +…

Q: Discuss characteristics of an economy that helps itself correct from a recessionary gap.

A: Potential GDP is the GDP that an economy can produce, given all its resources are at full employment…

Q: The following graph shows total production (TP) and the level of Natural Real GDP (NRGDP) for a…

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: Given the following: Ca = $100, Ig = $50, Xn = − $10, and G = $30, what is the economy’s equilibrium…

A: GDP = C + I + G + NX  C - Consumption  I - Investment  G - Government expenditure  NX - Net export…

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: a. The key idea of the aggregate expenditure model is that in any particular year, the level of GDP…

A: A summation of countries'final goods and services is known as Gross domestic product. As GDP…

Q: Based on The Aggregate Expenditure Model, what affects the level of consumption (five factors); and…

A: Aggregate expenditure is the total amount or prices charged for the goods and services produced and…

Q: What is the difference between aggregate expenditure and aggregate demand? Why is the aggregate…

A: Aggregate expenditure may increase with increase in proce. Aggregate demand may be having inverse…

Q: A simple economy consists of three industries: agriculture, manifacturing and services. The…

A: An economy is an integrated where the firms use the inputs of each other to produce some amount of…

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

A: Gross domestic product is the standard proportion of the value added made through the production of…

Q: The graph gives an economy's AE curve when the economy is in long-run equilibrium. Equilibrium…

A: Aggregate expenditure describes the total amount of spending in the economy through consumption,…