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According to the Figure below, since the 2008 recession short-run output, Ỹt, has been reached in 2017. a. positive; potential output b. increasing; actual output c. decreasing; a steady state FRED Billions of Chained 2009 Dollars 17,600 17,200 16,800 16,400 16,000 15,600 15,200 14,800 14,400 14,000 13,600 Real Potential Gross Domestic Product Real Gross Domestic Product 2006 2008 2010 2012 2014 and it has d. Negative; zero e. Above potential output; the golden rule 2016

According to the Figure below, since the 2008 recession short-run output, Ỹt, has been reached in 2017. a. positive; potential output b. increasing; actual output c. decreasing; a steady state FRED Billions of Chained 2009 Dollars 17,600 17,200 16,800 16,400 16,000 15,600 15,200 14,800 14,400 14,000 13,600 Real Potential Gross Domestic Product Real Gross Domestic Product 2006 2008 2010 2012 2014 and it has d. Negative; zero e. Above potential output; the golden rule 2016

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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**Question 19:** According to the Figure below, since the 2008 recession short-run output, \( \tilde{Y}_t \), has been _____ and it has reached _______ in 2017. a. positive; potential output b. increasing; actual output c. decreasing; a steady state d. Negative; zero e. Above potential output; the golden rule **Graph Explanation:** The graph provides a visual of the Real Potential Gross Domestic Product (GDP) and the Real Gross Domestic Product from 2005 to 2017. - The y-axis represents billions of chained 2009 dollars, starting from 13,600 to 17,600. - The x-axis covers the years from 2005 to 2017. - The blue line represents the Real Potential GDP, which shows a steady upward trend throughout the period. - The red line represents the Real GDP, which generally follows the blue line but dips below it during the recession years around 2008-2009, showing significant recovery and convergence towards the potential in the subsequent years, reaching similar levels to the potential by 2017. This illustrates the economic recovery after the 2008 recession and the closing output gap by 2017.
Transcribed Image Text:**Question 19:** According to the Figure below, since the 2008 recession short-run output, \( \tilde{Y}_t \), has been _____ and it has reached _______ in 2017. a. positive; potential output b. increasing; actual output c. decreasing; a steady state d. Negative; zero e. Above potential output; the golden rule **Graph Explanation:** The graph provides a visual of the Real Potential Gross Domestic Product (GDP) and the Real Gross Domestic Product from 2005 to 2017. - The y-axis represents billions of chained 2009 dollars, starting from 13,600 to 17,600. - The x-axis covers the years from 2005 to 2017. - The blue line represents the Real Potential GDP, which shows a steady upward trend throughout the period. - The red line represents the Real GDP, which generally follows the blue line but dips below it during the recession years around 2008-2009, showing significant recovery and convergence towards the potential in the subsequent years, reaching similar levels to the potential by 2017. This illustrates the economic recovery after the 2008 recession and the closing output gap by 2017.
14. GDP in the long run is determined by ____. GDP in the short run is determined by ____. a. Investment; the money supply b. Savings; the quantity equation c. Technology and input factors; the sum of all expenditures d. Interest rates; the production function e. Government purchases; the matching function
Transcribed Image Text:14. GDP in the long run is determined by ____. GDP in the short run is determined by ____. a. Investment; the money supply b. Savings; the quantity equation c. Technology and input factors; the sum of all expenditures d. Interest rates; the production function e. Government purchases; the matching function
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