The amount of real output that could be purchased at current prices if all of our assets were liquidated (turned to cash) and the money used to purchase goods and services is the
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The amount of real output that could be purchased at current prices if all of our assets were liquidated (turned to cash) and the money used to purchase goods and services is the
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- All of the following are reasons that spending on durable goods is volatile except durable goods are long-lived. good substitutes exist for durable goods. high prices make durable goods risky purchases. the purchase of durable goods is not affected by interest rates.Consider an economy that is characterized by the following equations: C = 150 + 0.65(Y - T) – 200r (Consumption) (Тахation) (Investment Demand) (Government Expenditure) (Exports) (Imports) T = 100 + 0.2Y I = 200 G = 500 - 200r X = 100 IM = 150 + 0.1(Y – T) – 100r (Money Demand) (Money Supply) L = -25 + 0.5Y - 500r M = 133,200 pSR = 120 (Short-Run Price Level) Answer each of the following questions. In your answers, be sure to state any assumptions that you impose and provide an explanation. Derive the AD and SRAS curves. Solve for the short-run equilibrium in the AD-SRAS model. Is your solution the same as in part 3 above? Why or why not? Is the fiscal multiplier in this economy larger or smaller than if the asset market were not accounted for in the model? Briefly explain. True or false? The aggregate demand curve is downward-sloping because the demand for goods and services increases as the price decreases. Briefly explain.What are the key indicators and factors that contribute to the onset of a recession in an economy?
- Consider an economy with three sectors: Fuels and Power, Manufacturing, and Services. Fuels and Power sells 75% of its output to Manufacturing, 10% to Services, and retains the rest. Manufacturing sells 15% of its output to Fuels and Power, 70% to Services, and retains the rest. Services sells 25% to Fuels and Power, 45% to Manufacturing, and retains the rest. Find the equilibrium price for each sector. Assume the total economy is valued at $1,000,000,000 The equilibrium price of the Fuels and Power sector is The equilibrium price of the Manufacturing sector is The equilibrium price of the Services sector isAn economy is based on three sectors, agriculture, manufacturing, and energy. Production of a dollar's worth of agriculture requires inputs of $0.30 from agriculture, $0.30 from manufacturing, and $0.30 from energy. Production of a dollar's worth of manufacturing requires inputs of $0.30 from agriculture, $0.30 from manufacturing, and $0.30 from energy. Production of a dollar's worth of energy requires inputs of $0.30 from agriculture, $0.40 from manufacturing, and $0.30 from energy. Find the output for each sector that is needed to satisfy a final demand of $30 billion for agriculture, $63 billion for manufacturing, and $20 billion for energy. The output of the agricultural sector is billion dollars. (Round the final answer to three decimal places as needed. Round all intermediate values to six decimal places as needed.)The graph below is associated with a hypothetical country. Consider a decrease in aggregate demand (AD). Specifically, aggregate demand shifts to the left from AD₁ to AD2, causing the quantity of output demanded to fall at each price level. For instance, at a price level of 140, output is now $200 billion, where initially it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 90 0 100 +-+ I I 200 300 400 500 OUTPUT (Billions of dollars) AD1 AD2 600 700 800 ?
- From 2009 to 2019, suppose that GDP increased by 25 percent. Real GDP increased by 15%. The overall level of prices increased by about 10% 20% 15% 5%The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $1,540 million. Enter the amount for government purchases. National Income Account Value (Millions of dollars) Government Purchases (GG) Taxes minus Transfer Payments (TT) 455 Consumption (CC) 700 Investment (II) 490 Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. National Saving (S)National Saving (S) = = (y-t-g, g-t, y-c, y-c-g) = = (C,G,Y,I) $ ______millionThe reallocation of goods from low to high valued use can take the form of a change in legal ownership or a physical reallocation of the good from an area where it has low value to an area where it has a higher value. In this case, used cars are worth [more, less] in Mexico than they are in the United States. We know this because the price of used cars is [higher,lower ] in Mexico compared to the US. If people are left alone to pursue their self-interest as they define it, owners of used cars will enrich themselves if they physically relocate there cars to Mexico and sell them. They might do this directly or middlemen may do it for them. In either case, used cars ["will be sent from u.s to Mexico", "will be sent from Mexico to U.S"] . The graph shows the used car markets in the US and Mexico when the government interferes in the free market and prevents/regulates the sale of…
- Suppose the U.S. has an investment opportunity which costs $200 which will increase output from 100 to 110 per quarter. The investment would take effect after t = 0. What is the marginal product of capital (MPK)? What is the difference in the present value of future income in the U.S. of undertaking the investment if the real world interest rate is 8%? Should the U.S. borrow from abroad to fund the investment and why?When the pandemic hit in the beginning of 2020, everything came to a halt. In a single month, 17 million Americans lost their job, and the gross domestic product (GDP), which is how economists measure the total value of a country's products and services, declined by US$2.15tn (£1.55tn). Economists were hopeful that across the world government spending and monetary policy would keep the economy from totally collapsing. During the first wave of lockdowns and stay-at-home orders since December 2019, it was clear that industries that relied on in-person customers - like travel and some retail - were going to struggle, while others would more easily adapt to the "new normal". Tech-heavy companies that delivered products or services to people's homes—like Amazon, Netflix, and Shopify—thrived. To improve the impact of the pandemic, most countries adopted an expansionary monetary policy. The change in the real interest rate influenced the goods market. Aggregate demand changed but there was no…The following table contains data on the fictional country of Penguinia. Presented are the country's nominal GDP, real GDP, and the GDP chain price index for various years. The base year for the chain price index is 2011. Using the data in the table, fill in the blank cells with the correct values. Year Nominal GDP Real GDP GDP Chain Price Index 2014 $8,766 $6,871 127.58 2017 $8,699 119.08 2020 $9,203 $7,926 From 2014 to 2017, nominal GDP ________ by __________ , while real GDP _______ by ___________ .