Question 5 The level of economic activities will go into contraction (recession) in all of the following situations except One. It is: An increase in the interest rate. An increase in foreign public debt. An increase in proportion of liquid assets in the total wealth of the society. O A decrease in investment expenditures.
Q: The US consumer expenditure in durable goods decreased by 12%. In the US, the prices of oil…
A: Increase in consumer expenditure can be represented by IS-LM short run relationships . Change in…
Q: Between a trough and a peak, the economy goes through a(n) Ohyperinflation. bust. recession.…
A: DISCLAIMER “Since you have asked multiple questions, we will answer the first question for you. If…
Q: Question 4 A country's gross domestic product for a given time period is the total market value of…
A: GDP or Gross Domestic Product is the sum total of the market value of the final goods and services…
Q: Which of the following will reduce the magnitude of the accelerator? a. A lower multiplier. b.…
A: In the context of the options provided: a. A lower multiplier: The multiplier effect is related to…
Q: Suppose that you are a consumption smoother. You expect to live for another 28 years. You just…
A: According to the permanent income hypothesis, people will spend money at a rate that is consistent…
Q: 2. Aggregate supply (AS) denotes the relationship between the holding the price of that firms choose…
A: The Aggregate Supply Curve is one of the most fundamental concepts when studying Macroeconomics. The…
Q: 5. The U.S. conducts a great deal of trade with western European countries. Suppose western European…
A: A phenomenon that results in a significant decline in economic activity that persists for an…
Q: Interest rates Domestic currency value relative to the foreign currency Consumer expectations about…
A: Aggregate demand is composed of consumption spending, investment spending, government purchases, and…
Q: 21. Assuming Mexico, one of the major trading partners with the United States, starts experiencing…
A: When the economic growth in an economy slows down we can state that there exists an economic…
Q: Which of the following is the technical definition of a recession? A. a fall in GDP for four…
A: Recession is a period when economic activities are falling.
Q: Other things being constant, what will be the effect of each of the following on consumption and…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 1.) If consumption falls, Keynesians believe unemployment will ________ for everyone, while…
A: Austrian economist Friedrich Hayek believed that the New Deal wasn’t sustainable. He felt that…
Q: Question 16 The economy is said to face a problem of "Inflation" when: O There is an increase in the…
A: In economics, the problem of inflation is related to a rise in the general price level in the…
Q: How many recessions did the US economy experience between 1929 and 2020? What were the four longest…
A: A phase of the business cycle in which a significant and widespread decline in economic activity is…
Q: usually increase(s) when the U.S. 4) economy is in a recession and decrease(s) when the U.S. economy…
A: Consumer spending usually falls in recession and rises when the economy is expanding. Hence, option…
Q: 1. Consider an economy at full employment. If consumers and firms become less optimistic about the…
A: Two fundamental ideas in labor economics that explain people's conditionconditions in the labor…
Q: 1) How does the following transaction affect Canada’s GDP? Unless otherwise indicated, assume that…
A: James bond(resident of Canada) purchases a martini for 12 $ will increase the Canada GDP. The above…
Q: 4. Other things being constant, what will be the effect of each of the following (or real GDP)? (a)…
A: GDP is a measure of national income, it is the value of all goods and services produced in a country…
Q: QUESTION 10 The quantity of real GDP supplied decreases if the price level O rises; increases…
A: The macroeconomic equilbrium in an economy is determined by the aggregate demand and aggregate…
Q: Assume that the economy begins in long run equilibrium and the central bank increases the target…
A: As the central bank raises the target interest rate, it reduces the money supply, which raises the…
Q: 1. Suppose an economy is currently in the steady state. Show in clear and well labelled labelled…
A: Steady-state is necessary to understand the Solow model. At the steady-state, the rate of investment…
Q: AD2 AD1 AD3 Real Domestic Product, GDP Refer to the graph. Which of the following changes will shift…
A: Answer: Explanation :- A cut/ decrease in personal and business taxes will increase the purchasing…
Q: PRICE LEVEL 100 100 130 120 110 100 8 O 100 200 300 400 500 600 OUTPUT (Billions of dollars) ₂ AD₁…
A: The total amount of goods and services demanded in an economy at a given price over a given time is…
Q: During the Covid-19 recession, from the fourth quarter of 2019 to the fourth quarter of 2020,…
A: C. increased by 20 percent; declined by 5 percent Consumer spending on home construction soared…
Q: Suppose real estate analysts expect that 100,000 homes will be needed in a particular community by…
A: The real estate financial analyst serve as the strategic movers behind property investment they…
Q: Assume that a nation's marginal propensity to consume (MPC) is 0.75. A highly productive,…
A: "Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: 3. Suppose that investment as a fraction of output in the United States rises permanently from 0.15…
A: Consumption is a task in which institutional units use up products or services; consumption can be…
Q: (a) Suppose the price level in an economy rises while the money wage rate remains constant. What…
A: The objective of the first part of the question is to understand the impact of changes in price…
Q: Assume that the economy begins in long run equilibrium and the central bank increases the target…
A: There is inverse relationship between the rate of interest and investment. Higher the interest rate…
![Question 5
The level of economic activities will go into contraction (recession) in all of the following situations except One. It is:
O An increase in the interest rate.
An increase in foreign public debt.
An increase in proportion of liquid assets in the total wealth of the society.
A decrease in investment expenditures.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8df34b92-016b-4d4d-831d-cd2fe369d3a5%2F0101dc2a-6b07-4452-abd6-2b2e0d00eb07%2Frud17jp_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- 4) economy is in a recession and decrease(s) when the U.S. economy is expanding. A) Consumer spending B) Planned investment C) Net exports D) Unplanned investment usually increase(s) when the U.S.During the Covid-19 recession, from the fourth quarter of 2019 to the fourth quarter of 2020, consumer spending on residential construction ________ and consumer spending on services ________. Part 2 A. declined by 20 percent; increased by 20 percent B. increased by 5 percent; increased by 10 percent C. increased by 20 percent; declined by 5 percent D. declined by 25 percent; declined by 40 percent. The US consumer expenditure in durable goods decreased by 12%. In the US, the prices of oil quadrupled. In the UK, The US dollar appreciated by 12%. China is an important US trade partner. China's income quadrupled in the past 10 years, increasing the demand of many US products. At the same time, the Dow Jones Industrial Average (DJIA) increased by 12.5% over the past two quarters. The effect of these events on the US economy is: (show the final effects on your graph). The expenditure of durable goods in the US decreased by 14% in 2018. At the same time, minimum wage increased from $7.25 to $9 per hour, increasing production costs in the manufacturing industry and throughout several other industries.
- MACROECONOMICS Topic: Multiplier Investment ProblemCost of bldg.. =5MGross Revenue = 9.5 MOperating expense = 4MNominal interest rate = 12%Ongoing inflation rate = 8%a) Determine the real interest rateb) Determine the interest costc) How much will be added to the firm's profit?COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate. a. Reflecting on the above situation justify whether the State Bank of Pakistan should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. b. Reflecting on the above situation justify whether the Government of Pakistan should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically.(d) Suppose government spending increases by some amount AGo to become Go+AGo. Show the change in Y and C as a response to this increase in spending.
- Need help with macroeconomic review questions! 1) How does the following transaction affect Canada’s GDP? Unless otherwiseindicated, assume that each of the subsequently mentioned people resides in Canada. (j) James Bond purchases a martini, shaken not stirred, for $12, in Calgary. 2) Consider a country with no government and no international trade. The country’seconomy has fixed prices and interest rates. Let C = 300 and I = 150 + 0.75Y . Whatis this country’s GDP? Show your work. 3) Consider a country with no international trade. The country’s economy has fixedprices and interest rates. Let C = 300 + 0.2Y , I = 250, and G = 0.5C. What is thiscountry’s GDP?What is a foreign exchange rate? (a) The rate at which the currency of one country trades for the goods ofanother country.(b) The rate at which one country’s goods trade for those of another country.(c) The rate at which currencies of different countries are exchanged.(d) The rate at which one country’s currency trades for gold provided byanother country. Induced consumption is: (a) the part of consumption which is independent of the level of income.(b) the minimum level of consumption that is financed from sources other than income.(c) The maximum level of consumption that is financed from sources other than income.(d) shown by the slope of the consumption function. In the Keynesian model, an introduction of a proportional tax will: (a) increase the slope of the consumption function.(b) reduce the multiplier.(c) increase the equilibrium level of income.(d) increase the multiplier. A decrease in the price level will: (a) shift the AS curve to the left.(b) shift the AD curve to the…COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate.QUESTIONReflecting on the above situation, justify whether the Government of country A should opt for expansionary or contractionary fiscal policy as a stabilization policy. Also illustrate it graphically. (150words)
- COVID-19 all around the world has restricted the economic activity. To stop the spread of the virus Pakistan like many other countries adopted the policy of smart lockdown. Shutting down of the industry has created adverse supply shock in the economy. While, the slowdown in business and economic activities the country is in the recessionary phase of the business cycle as the GDP growth for the FY 2020-21 is expected to be -0.2 accompanied by high unemployment and poverty rate.QUESTION Reflecting on the above situation justify whether the State Bank of country A should opt for easy or tight monetary policy as a stabilization policy. Also illustrate it graphically. (150words)If a consumer purchases a foreign-produced hair dryer at a department store, the value of the hair dryer is: a. included in both consumer purchases and exports. b. added to capital investment in equipment but then subtracted from consumer purchases. c. included in consumer purchases but then subtracted as part of imports. d. added to imports but then subtracted as part of exports. Please explain your answer4. The Production function is given by Y= AK1/2L1/2 The economy initial level of capital stock is 60,000 billion dollars. The nominal interest rate is 4%, the inflation rate is 2% and the depreciation rate is 10% . The real price of capital is 3000. a) Calculate the value of the cost of capital. b) What is the current stock of capital and future stock of capital (next period) if the value of current production is equal to 20,000 and next year will be 22,000, assuming that interest rates, inflation and depreciation stay constant. c) Calculate net and gross investment in both periods (current and future).
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)
![ECON MACRO](https://www.bartleby.com/isbn_cover_images/9781337000529/9781337000529_smallCoverImage.gif)