If an economy is at full employment and Aggregate Demand decreases suddenly, this will cause which of the following? a) an increase in underemployment b) a reduction in tax revenues collected c) a decrease in GDP d) All of the choices is correct e) an increase in unemployment
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If an economy is at full employment and Aggregate Demand decreases suddenly, this will cause which of the following?
a) an increase in underemployment
b) a reduction in tax revenues collected
c) a decrease in
d) All of the choices is correct
e) an increase in
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- Comment, on the likely outcome with sufficient arguments? a) Impact on GDP when, Interest rates have come down in the countryb) Impact on balance of payment, when there is a huge demand of vaccines produced in India in South Africa.c) Inflation rate in India reaches negative 2% (-2%)d) The aggregate demand falls short of aggregate supply in the economyComment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.Which of the following statement is true? A) Economic fluctuations are irregular and unpredictible B) Most macroeconomic quantities fluctuate together C) As output falls, unemployment rises D) All of the above
- When Full employment GDP is less than equilibrium GDP, the economy faces A) Recession B) Inflation C) Cannot be determined D) unemploymentFull employment output is the level of output that firms in the economy supply when A- all capital is fully utilized B- the unemployment rate is zero C- taxes are zero D- consumption decreases and saving decreasesWhen an economy is experiencing a recessionary gap, the likely outcome is a) quickly rising output prices. b) an increase in the number of workers receiving employment -insurance benefits. c) the number of employment - insurance recipients being the lowest ever . d) consumers optimistic about the future.
- Which of the following would cause a leftward shift of aggregate demand?(a) An expectation of increased business regulation and restrictions on the use of technology causes a decrease in investment spending.(b) A decrease in interest rates causes an increase in investment spending.(c) A depreciation of the domestic currency on foreign exchange markets causes an increase in net exports.(d) A decrease in income tax rates results in more disposable income for households and increased consumer spending.Choose the correct match of each of the following economic concepts: A Unemployment caused by a decrease in the demand for some goods and services B The equilibrium point is to the left of the full employment point graphically C The inverse of the marginal propensity to consume (MPC) D Total Leakages exceeds Total Injections The Multiplier The equilibrium point is the same as the full employment point graphically E v National income equilibrium E Total Injections exceeds Total Leakages Ev Inflationary Gap G The equilibrium point is to the right of the full employment point graphically Structural Unemployment | Increases with the increase in the marginal propensity to save (MPS) |Unemployment resulting when workers change their jobs |Increases with the increase in the marginal propensity to consume (MPC) K Total Leakages equals Total Injections Unemployment that appears during the downturn of the business cycle A Moving to another question will save this response. « < Question 16 ch…In our Aggregate Demand and Supply model, a decrease in Aggregate Demand would cause which of the following in the short run? Group of answer choices a) neither deflation nor inflation b) deflation and recession c) inflation and economic growth d) inflation and recession e) deflation and economic growth
- Recent data from the Bureau of Labor Statistics show that the average price level for consumers rose 5.4% over the past year. While some are expressing concern over rising inflation leading the economy to “overheat,” there is some evidence indicating that this is due to the reopening of the economy as producers adjust to rising demand for goods and services. Many of the goods with the largest price increases, like bacon or cars and trucks, cannot have their production ramped up as quickly as demand is increasing. Other industries are facing supply chain challenges, like shortages of truck drivers. These problems are most likely to be short term, so, as supply catches up with demand, we can expect to see prices return to normal. As evidence, after spiking to record highs in early summer, lumber prices have now fallen below their price at the start of the year. The reason for the dramatic price increase earlier in the year was a combination of reduced supply in 2019 and a surge in demand…Identify the point or points for which the following is true: The economy is exhibiting inefficient production or unemploymentA 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
