or an intiationary expenaiture gap. a. Given that full employment exists at $4,500, does a recessionary gap or an inflationary gap exist? Recessionary gap v b. Identify this gap in the diagram below. Instructions: (1) Use the tool provided 'Gap' to show this expenditure gap. This will display a two-ended arrow. Drag one end of the arrow to the lowest value of the expenditure gap and drag the other end to the highest value of the gap.

or an intiationary expenaiture gap. a. Given that full employment exists at $4,500, does a recessionary gap or an inflationary gap exist? Recessionary gap v b. Identify this gap in the diagram below. Instructions: (1) Use the tool provided 'Gap' to show this expenditure gap. This will display a two-ended arrow. Drag one end of the arrow to the lowest value of the expenditure gap and drag the other end to the highest value of the gap.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Supply, S Real Interest rate Demand Loanable funds (billions of dollars per year) Refer to the graph above. Which of the following situations would have caused the shift as shown in the graph? O Taxes are changed so that real interest income is taxed rather than nominal interest income An expected recession decreases the profitability of new investment O The government runs a budget deficit O Technological change increases the profitability of new investment
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Refer to the following figure 1. For this economy, if the actual price level exceeds theexpected price level, how much output will the economyproduce in the short-run? A)$17 trillionB)$17.2 trillionC)$16.7 trillionD) Both A and C.2. Given the situation in part (a), this economy wouldexperience A) a recessionary gap of $0.3 trillionB) an expansionary gap of $0.2 trillionC) neither a recessionary gap nor an expansionary gap.D) an expansionary gap of $17.2 trillion. 3. Given the situation in part (a), in this economy (circlethe letter representing the right answer below)A) the actual rate of unemployment would be less than thenatural rate of unemployment.B) the actual rate of unemployment would be above the naturalrate of unemployment.C) the actual rate of unemployment would be equal to thenatural rate of unemployment.D)none of the above.4. In this economy, given the situation in part (a), in thelong-run (circle the letter representing the right answerbelow)A) the nominal wage…
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Suppose that the demand for a product is P = 50 – 2Q. If price rises very slightly from P = 24, A. total expenditure will rise. B. total expenditure will fall. C. total expenditure will not change.
What do the coloured lines represent in the graph
Aggregate Supply and Aggregate Demand Real GDP Supplied Price $ 250 $ 500 $ 750 $1000 1500 3000 4500 4500 Real GDP Demanded 5500 5000 4500 4000 a. Plot the aggregate supply and aggregate demand curves on the same graph. b. State the equilibrium real GDP and price level. c. At the equilibrium GDP from part b, is the economy experiencing a recessionar gap? Explain why it is or is not experiencing a recessionary gap. d. State what happens to the nominal wages and the real wage in the short run phase of the aggregate supply.
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Which of the following will NOT shift the ADTT curve? O a. A rise in consumer confidence O b. A rise in interest rates O c. A rise in government spending O d. A rise in exports
When the macroeconomic equilibrium is such that real GDP is less than potential real GDP, the economy is suffering from and the government policy to eliminate this gap will the price level. real GDP and to A. an inflationary gap; increase; decrease a recessionary gap; decrease; decrease OC. a recessionary gap; decrease; increase B. D. an inflationary gap; decrease; increase OE. a recessionary gap; increase; increase