If the U.S. economy is currently at point K, which of the following could cause it to move to point N? OA. The price level in the United States falls relative to the price level in other countries. OB. Congress abolishes investment tax incentives. OC. The interest rate rises. O D. Household wealth declines. Real aggregate expenditure, AE (trillions of dollars) Y=AE AE AE, Real GDP, Y (trillions of dollars)

If the U.S. economy is currently at point K, which of the following could cause it to move to point N? OA. The price level in the United States falls relative to the price level in other countries. OB. Congress abolishes investment tax incentives. OC. The interest rate rises. O D. Household wealth declines. Real aggregate expenditure, AE (trillions of dollars) Y=AE AE AE, Real GDP, Y (trillions of dollars)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

increase in aggregate demand. Question 10 When the interest rate increases, 1. The domestic currency depreciates and net exports increase. II. The return to saving increases and households save a higher fraction of income. III. Firms are able to finance more capital purchases and investment increases. IV. Aggregate demand decreases. # 3 O I, II and IV O I, II, III and IV O II and IV OI and IV 80 F3 S 4 F4 % 5 F5 No new data to save. Last checked at 11:21pm Sub. < (O 6 F6 & 7 F7 * 00 8 DII FB ( F9
Question:4,5
Changes in the interest rate affect planned investment spending and income level. This change in planned investment spending: O a. O b. is crowded out by an increase in government spending. is crowded out by an increase in taxes. O c. only causes a movement along the LM curve. O d. only causes a movement along the IS curve.
Please give short answers but ASAP
4. Assume the following model of the expenditure sector: AD=C+I+G+NX C = 420 + (4/5)YD YD=Y–TA+TR TA = (1/6)Y TRo = 100 Io = 160 Go = 180 NXo =–40 b) Assume we want to reach Y* = 2700 by changing government transfer payments (TR) instead. By how much should TR be changed?
Keynes developed his aggregate expenditure model to explain why some economies have faster economic growth than others. O economic growth. how economies can reach equilibrium at a level of income below full employment. inflation.
An inflationary gap is the amount by which: O Equilibrium GDP falls short of the full-employment GDP. O Aggregate expenditures exceed any given level of GDP. Saving exceeds investment at the full-employment GDP. Aggregate expenditures exceed the full-employment level of GDP. A Moving to another question will save this response. ere to search DELL
Other things remain unchanged, a country's Aggregate Demand is made up of $100 billion of consumption, $40 billion of investment, $10 billion of net exports, and $20 billion of government purchases. Full-employment GDP is $200 billion. To obtain full employment under these conditions, the government should: Select one: a.increasing corporate income taxes to discourage private domestic investment. b.reduce tax rates and/or increase government spending. c.increasing interest rate on government bonds to encourage personal saving.
The graph below shows an economy operating at equilibrium in both the short run and long run at its full employment level of output. a. Show what happens when this economy moves from its full-employment equilibrium into a period of stagflation. Use the graph to draw either a new AD curve or new AS curve to demonstrate stagflation in this economy Instructions: Use the tool provided "New Curve to plot the appropriate line. After placing the curve, click on "Select and choose whether to label the curve "AD" or "AS" from the dropdown menu. Aggregate Demand and Aggregate Supply Price Level LRAS Tools New Curve 0
The macroeconomy is depicted by the graph to the right 160- a. The current equilibrium price level and output level respectively are: 80 and $ 10 trillion. (Enter your responses as a whole numbers.) LRAS 140- b. The full employment level of GDP is SRAS O A. $10 trillion since the LRAS is defined at this point. 120- O B. unknown since no information was provided about the labor market. 100- O C. $10 trillion now but thereafter it depends on what the aggregate demand curve does. O D. $10 trillion now but it depends on the SRAS curve. 80- 60- AD 40- 10 12 14 16 18 20 Real GDP ($ trillions) Price level
Please correct answer
4. d Suppose the Canadian economy is currently at point K as shown in the diagram above. Explain briefly two events that could cause it to move to point N.