← During 2009, the Federal Reserve was easing monetary policy in an attempt to boost the economy. That same year, Congress passed the American Recovery and Reinvestment Act that cut taxes and expanded existing tax credits for working families and businesses As a result of this policy, CA. both the interest fate and GOP should increase OB. the interest rate should increase and the effect on GDP should be ambiguous Q OC GDP should increase and the interest rate should decrease. OD. GDP should increase and the effect on the interest rate should be ambiguous
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- Explain whether the following stati:,,.nents arc true,false, or uncertain.a. "lnflation hurts borrowers and helps lenders,because borrowers must pay a higher rate ofintc.rcst. 1'b. "lf prices change in a way that leaves the overallprice level w,changro, then no one is made betteror worse off.''c. "Inflation docs not reduce the purdtasing powerof most workers . ''How did government purchases and real GDP co-move during and afterthe Great Recession?Imagine that a country produces only three goods: npples, bananas, and cerrots. The quantaies produced and the prices ut the thee goods are fisted below Seve & tah S Onoda Produced Apples Bananas Carrots 12 22 Price $2.00 1.50 1.00 Instructions: Round your answers to 2 decimal places. a. What is this country's GDP? b. Suppose that a drought hits the country, causing the quantity of apples produced to fal to 3. Assuming that ali prices remain constant, what is this country's new level of GDP? E. Assume, once again, that the quantities produced and the prices of the three goods are as listed in the table. Given this situation, carrot sellers decide that the price of carrots is too low and agree to raise the price of carrots. If GDP is $80.00, what will be the new rice of carrots? per carrot
- Suppose an economy can be represented by the folowing table, in which employment is in millons of workers and GDP and AE are expressed in billions of dollars: Employment 100 Real GDP Aggregate Expenditures 1275 1350 1425 1500 1575 1650 1200 105 1300 1400 1500 1600 1700 110 115 120 125 fut employment is 120 milion workers? What is its what kind of expenditure oap exists size? Suppose government spending, taxes, and net exports ane all independent of the level of rcal GDP. What is the multplier an ths economy? below the econemy's potential, what is the size of the recessionary expenditure qaptces IC raw ill ady Answer five questions given the following data for 2019: The Equivalence of Expenditure and Income (in Billions of Dollars) Expenditure C: Consumer goods and services I: Investment in plants, equipment, and inventory G: Government goods and services X: Exports M: Imports GDP: Total value of output b. Gross private investment d. Exports % c. Total government purchases e. Imports FI Instructions: Enter your responses as a percentage rounded to one decimal place. Calculate the following as a percentage of GDP for 2019: a. Personal consumption expenditures % % % EL Q Search @ F2 A $14,561 # 3,744 3,754 2,504 F3 (3,136) $21,427 F6 A $11,434 2,075 1,658 778 645 1,494 3,463 (120) $21,427 Q F7 & PrtScn 18. * Home F9 FWhat are typical GDP patterns for a high-income economy like the United States in the long run and the short run?
- Without looking at Table 19.7, return to Figure 19.10. If we define a recession as a significant decline in national output, can you identify any post-1960 recessions in addition to the 20082009 recession? (This requires a judgment call.)R MPA a MPB ISB ISA the Fed wilIN To prevent a Consider figure, if there is a sharp increase in consumer confidence, the economy will move from point and the economy moves from point O A. a to point d; recession; lower interest rates; d to point b O B. b to point a; bubble; raise interest rates; a to point d O C. d to point c recession; lower interest rates; c to point b O D.a to point d; recession; lower interest rates; d to pointc 12 O E. c to point b; bubble; raise interest rates; b to point C LGEconomics PIODiem set is dde OIT AprTO 1. Let the following equations characterize the economy (note the addition of a tax rate on output): Y = 500 C = 60 + 0.8(Y-T) |= 30 - r G = 100 T = 0.4Y a) Calculate national saving, private saving, and public saving. b) Obtain the mathematical expression for the AD in this particular economy. Draw the graph. c) Determine the equilibrium interest rate (you can use the loanable funds market). Draw the graph for the lonable funds market. d) If Government spending increases to 120, what is the effect on income? Draw the new equilibrium in a graph (old and new in same graph).
- A fall in mps raises the GDP multiplier. O True O FalseThere are the three reas0ns why aggregate demand is d0wnward sl0pe: real wealth effect, interest rate effect, exchange rate effect. In a case scenari0, the market saw an increase in c0nsumer spending when there is a b00m in ec0n0my. 0r the ec0n0mic crisis makes the public bit shy t0 buy 0r c0nsume any pr0duct. In the ab0ve tw0 situati0ns: the transfer payment d0es n0t make the part 0f g0vernment spending as the public will spend the m0ney given as self-security and unempl0yment. Exp0rt situati0n gets w0rse as the f0reigners are reluctant t0 buy expensive g00ds and the g0vernment will make s0me imp0rts. The b0rr0wing has bec0me easy and l0ans are issued at a cheaper rate t0 buy car. F0ll0wing the equati0n: Y = C + I + G + NX will the bel0w examples increase 0r decrease the aggregate demand in Indian? What will be the shift in p0siti0n f0r bel0w situati0ns? Widespread fear 0f recessi0n The appreciati0n in the Indian Rupee rate A b00m in the st0ck market An increase in transfer…There are the three reas0ns why aggregate demand is d0wnward sl0pe: real wealth effect, interest rate effect, exchange rate effect. In a case scenari0, the market saw an increase in c0nsumer spending when there is a b00m in ec0n0my. 0r the ec0n0mic crisis makes the public bit shy t0 buy 0r c0nsume any pr0duct. In the ab0ve tw0 situati0ns: the transfer payment d0es n0t make the part 0f g0vernment spending as the public will spend the m0ney given as self-security and unempl0yment. Exp0rt situati0n gets w0rse as the f0reigners are reluctant t0 buy expensive g00ds and the g0vernment will make s0me imp0rts. The b0rr0wing has bec0me easy and l0ans are issued at a cheaper rate t0 buy car. F0ll0wing the equati0n: Y = C + I + G + NX will the bel0w examples increase 0r decrease the aggregate demand in Indian? What will be the shift in p0siti0n f0r bel0w situati0ns? An increase in transfer payment A decrease in real interest rate in India