Suppose real GDP exceeds potential real GDP. If the government decreases its expenditures on goods and services, then real GDP _______and the price level ________   (a) Decreases; rises (b) Increases; falls (c) Decreases; falls (d) Increases, rises

Q: 389. The economy is in a recession. And consumer spending for large appliances (such as…

A: The labor demand curve is a curve that shows the negative relationship between wage rate and…

Q: Questio When is a country said to move into a recession? a) If actual output falls below the…

A: A recession is classified as a significant reduction in overall economic activity that lasts more…

Q: On the supply side of the GDP, Structures account for around __________ of U.S. GDP.   a)57% b)7%…

A: C or Consumption expenditure is the expenditure incurred on the consumption by households.G or…

Q: United States, the various state governments almost all have laws that require them to balance their…

A: Expansionary fiscal policy is utilized to launch the economy during a recession. It supports total…

Q: O Assume that the United States economy is currently in long-run equilibrium. a) Draw a correctly…

A: Economy is already at full employment level . Under this situation where natural rate of…

Q: If both imports and exports rose, O aggregate demand (AD) would decrease. Oaggregate demand (AD)…

A: Aggregate Demand(AD) = C+I+G+(X-M) where,  C is Consumption I is Investment G is Government…

Q: [Extended dynamic analysis and reflection] Petrol prices have recently jumped, and this appears to…

A: Oil prices, like gasoline prices, have an important influence in determining production costs and,…

Q: 17. Aggregate operations planners seek to match supply and demand at the minimum overall cost and:…

A: It is important for an organization to make a balance between demand and supply by holding an exact…

Q: True or False: Aggregate demand (AD) represents the total amount of goods and services that…

A: Aggregate demand is the total demand for goods and services in an economy at a given price level and…

Q: In the short run, the quantity of output that firms supply can deviate from the natural level of…

A: The sticky wage theory contends that changes in business performance or the status of the economy…

Q: 7) Spending on the war in Afghanistan is essentially categorized as government purchases. How do…

A: Aggregate demand is the total demand in an economy which consists of demand by household…

Q: According to the Congressional Budget Office's projections, real GDP in 2007 was marginally higher…

A: The inflation adjusted value of services and goods produced in an economy at a specified time period…

Q: An increase in productivity will: Multiple Choice increase aggregate supply. Increase aggregate…

A: Labor productivity= total output / number of labor

Q: As a result of a decrease in the value of the dollar in relation to other currencies, American…

A: The market equilibrium refers to the situation when the aggregate demand is exactly equal to the…

Q: ______ is the total quantity of goods and services that will be purchased at all possible price…

A: In economics, demand and supply analysis is the primary concept when understanding market condition.

Q: Explain how each of the following affects consumption demand. (a) The expectation is that the…

A: Consumption is the part of income that is not saved from the income . And saving is used for the…

Q: Macro-economic recessions, like the one in 2008 – 09, are often related to the fact that consumers…

A: The budget line refers to the graphical representation of the combination of two goods with income…

Q: 1. Graph aggregate supply (AS) curve and aggregate demand (AD) curve. 2. At price level = 160, what…

A: Surplus is the situation where aggregate supply is higher than aggregate demand.

Q: At a price level of 105, firms are unable to _______.     A. meet the demand for their output, so…

A: When more of a good is needed than is being produced, this is referred to as a shortage. When prices…

Q: In the short run, the decrease in consumption spending due to the increase in saving shifts the…

A: Aggregate demand (AD) is the sum total amount of commodities and services demanded in an economy at…

Q: If the government wants to increase real GDP levels, it could

A: Through fiscal policy government can increase real gdp.

Q: Price Level AD₂ AD₁ AD3 0 Real Domestic Output, GDP Refer to the accompanying graph. What…

A: The following graph addresses the Aggregate Demand curves in an economy. These curves show the…

Q: An increase in consumer confidence in a country will result in a 1.shift of the aggregate demand…

A: Consumer confidence is the index that shows the optimism that consumers have on the economy at any…

Q: To decrease output the government could adopt policies that :Select one a. increase aggregate supply…

A: Equilibrium Point: The point at which the aggregate demand curve and aggregate supply curve cuts…

Q: An increase in the price of a barrel of oil will shift the aggregate demand curve to the left and…

A: Increase or decrease in input costs affect aggregate supply curve.

Q: Suppose that firms become very pessimistic about future business conditions and cut heavily on…

A: Economics starts at E's long-term equilibrium. The balance level of GDP Qf and the equilibrium price…

Q: O A. a temporary decrease in Y, though decreasing prices push output back to Yn at the lower price…

A: Aggregate Demand:Aggregate demand refers to the total quantity of goods and services demanded by all…

Q: 3. For each question, draw an economy in equilibrium, labeling the initial equilibrium price level…

A: (i) When there is decrease in wealth.   When the wealth decreases, the consumption tends to falls…

Q: 6) relates to the number of goods and services that consumers are willing to buy 6) at different…

A: Demand refers to the volume of goods and services that a consumer is willing to purchase at a given…

Q: Full employment output is the level of output that firms in the economy supply when A- all capital…

A: Full employment output refers to the output level that results from the equilibrium in the labor…

Q: Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly…

A:

Q: Q2. The economy is originally at S and De levels for supply and demand. Explain the effects on the…

A: Demand refers the total amount of goods and services that are willing and able to buy at the…

Q: During the last two years there has been a depletion of groundwater in the nation because of a…

A: Note : Three sub parts of the question will be answered in case of a question with multiple sub…

Q: 11. Recession True or False: The aggregate-demand curve slopes downward because it is the horizontal…

A: Aggregate Demand: The aggregate demand is a sum of private investment demand, government…

Q: 1)  Suppose the economy is in long-run equilibrium. If there is a sharp increase in the expected…

A: The aggregate demand is downward sloping and the aggregate supply would be upward sloping and the…

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: Suppose that the government believes the economy is not producing goods and services at its optimal…

A: Answer is given below

Q: Consider the following government policy initiatives for an economy consider the short-term and…

A: Tax is the amount that is charges by the government from the consumers.

Q: Josh wants to buy a house. If the price level increased by 8%, due to___ (other things equal) Josh…

A: The interest rate after inflation adjustment is called the nominal interest rate. The real interest…

Q: Suppose that when the price of a good rises by 8%, the quantity demanded that good falls by 13%.…

A: It can be defined as a tool that helps in the calculation of the total money spent on the…

Q: If the government increases its expenditure on goods and services and as a​ result, the money wage…

A: When the governemtn increases the expenditure on goods and service, the agrregate demand in the…

Q: Price Level Price Level O A AS₁ B AS2 AD Real Domestic Output (A) AS AD₂ AD₁ Real Domestic Output…

A: Equilibrium real domestic output in the market is produced at the intersection of AD and AS curves.

Q: The quantity of aggregate output demanded will fall if Select one: a. net taxes are reduced. b. the…

A: The correct answer is: b. the price level increases. Explanation: Aggregate Demand (AD) and Its…

Q: An increase in the demand for gasoline O leads to an increase in consumption and potential GDP.…

A: Potential Gross Domestic Product (GDP), which means potential output or full-employment GDP, is an…

Q: Show the impact of the increase in the price level by moving the point along the curve or shifting…

A: The change in the demand rate due to the change in the price is showcased by the change in the…