None If all prices adjusted immediately to balance the quantities suppliedand demanded for all goods and servicesoutput gaps would be positive more often than they would be negative.cyclical unemployment would be positive.potential GDP would rise much more quickly.output gaps would not exist.

The correct answer is Option D: Output gaps would not exist. Explaination: The outcome gap is the…

Answered: If all prices adjusted immediately to…

MACROECONOMICS FOR TODAY

10th Edition

ISBN:9781337613057

Author:Tucker

Publisher:Tucker

Chapter10: Aggregate Demand And Supply

Section10.A: The Self Correcting Aggregate Demand And Supply Model

Problem 2SQ

See similar textbooks

Similar questions

Most economists reason that an economy adjusts to inflationary and recessionary gaps slowly because are fixed in the short run. Consumer preferences Тахes Wages Supplies of most of the inputs
What happened to the Pe and Qe if the market supply increase by 5% at all price levels without any increase in deman?
Indicate whether each of the following statements is trueor false, and explain your reasoning. An intervention which raises nominal GDP will also decrease un-employment. Immigration into a country leads that country to focus more oncapital intensive goods.
Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagram
Many companies hold significant amounts of excess cash, that is, cash above the amount required for day-to-day operations. Does including excess cash as part of invested capital distort the ROIC upward or downward? Why?
An expansion ends when the economy O has grown for two quarters in a row. O hits a trough and then enters a recession. O begins to grow following a peak. hits a peak and then enters a recession.
When real GDP is greater than potential GDP, there is ________ which leads the inflation rate to ________.
Analyses of statistics of output, employment, and prices over the long term show that the economy grows. Characterize these trends as smooth or volatile. Explain. Use examples.
Describe the full employment macroeconomic equilibrium in the As-AD model. what would happen on the AS-AD model of the government put forward and pass 2 trillion dollarinfrastructure plan?what has happened to the equilibrium output and price level ?what gap would be created ?how does the economy respond to this gap? what has happened to the equilibrium output and price level due to part five?
A sudden increase in consumer spending will shift the aggregate demand curve to the right and lower the price level/inflation and increase the level of GDP output. True /False
What is inflationary gap? Select one: When aggregate expenditures are greater than the full employment level causing a demand pull-inflation When aggregate expenditures are greater than full employment level causing cost push inflation None of the options are correct It is the gap between a developed nation GDP and an under-developed/ developing nation GDP When aggregate expenditures are inadequate to bring about a full employment level
(a) As a response to the recent COVID-19 outbreak, the Commonwealth Government put in place lockdown restrictions. Using the dynamic AD-AS framework, analyse and demonstrate the impact of the COVID-19 pandemic on the level of output (or real GDP), unemployment, and inflation. (b) In response to the COVID-19 pandemic, in March 2020 the Commonwealth Government announced a fiscal stimulus which included income support for workers and businesses hit by the pandemic. Using the same dynamic AD-AS framework used in part (a), explain and illustrate the effect of the fiscal stimulus on the level of output (or real GDP), unemployment, and inflation. (c) Using the same dynamic AD-AS framework used in part (b), show what the impact of the fiscal stimulus would have been if Australia had no interactions in trade or finance with other economies (i.e. if Australia was a closed economy).

SEE MORE QUESTIONS

Recommended textbooks for you

MACROECONOMICS FOR TODAY

Economics

ISBN:

9781337613057

Author:

Tucker

Publisher:

CENGAGE L

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Survey Of Economics

Economics

ISBN:

9781337111522

Author:

Tucker, Irvin B.

Publisher:

Cengage,

MACROECONOMICS FOR TODAY

Economics

ISBN:

9781337613057

Author:

Tucker

Publisher:

CENGAGE L

Economics For Today

Economics

ISBN:

9781337613040

Author:

Tucker

Publisher:

Cengage Learning

Survey Of Economics

Economics

ISBN:

9781337111522

Author:

Tucker, Irvin B.

Publisher:

Cengage,

Exploring Economics

Economics

ISBN:

9781544336329

Author:

Robert L. Sexton

Publisher:

SAGE Publications, Inc

Macroeconomics: Private and Public Choice (MindTa…

Economics

ISBN:

9781305506756

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

Economics: Private and Public Choice (MindTap Cou…

Economics

ISBN:

9781305506725

Author:

James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS

If all prices adjusted immediately to balance the quantities supplied and demanded for all goods and services output gaps would be positive more often than they would be negative. cyclical unemployment would be positive. potential GDP would rise much more quickly. output gaps would not exist.