The following are aggregate demand and supply schedules for a hypothetical economy. All figures are in $ billions. Aggregate Quantity Demanded Price Index Aggregate Quantity Supplied 3500 2360 3400 2400 3300 2480 3200 2600 3100 3000 2900 2800 120 130 140 150 160 170 180 190 An inflationary gap of 340. O A recessionary gap of 240. 2760 3000 3260 3600 Note: Potential GDP is 3,000. Refer to the information above to answer this question. Assume that technological change increases aggregate supply by 340. What would be the result? O A new full-employment level of Real GDP of 3,340 with no change in pri prices. A new equilibrium of Real GDP of some indeterminate level depending on how much prices fell A new full employment level of Real GDP of 3,340 and lower prices

The following are aggregate demand and supply schedules for a hypothetical economy. All figures are in $ billions. Aggregate Quantity Demanded Price Index Aggregate Quantity Supplied 3500 2360 3400 2400 3300 2480 3200 2600 3100 3000 2900 2800 120 130 140 150 160 170 180 190 An inflationary gap of 340. O A recessionary gap of 240. 2760 3000 3260 3600 Note: Potential GDP is 3,000. Refer to the information above to answer this question. Assume that technological change increases aggregate supply by 340. What would be the result? O A new full-employment level of Real GDP of 3,340 with no change in pri prices. A new equilibrium of Real GDP of some indeterminate level depending on how much prices fell A new full employment level of Real GDP of 3,340 and lower prices

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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illustrates and how it is related to the aggregate demand curve. 3. Figure 11.8 shows the aggregate expenditure curve when the price level is 110. When the price level rises to 120, the AE curve shifts vertically downwards from AE, by $1 trillion. When the price level falls to 100, the AE curve shifts vertically upwards from AE, by $1 trillion. Figure 11.8: FIGURE 11.8 Short Answer Problem 10 (a) 8 Price level (GDP deflator) Aggregate planned expendit (trillions o FIGURE 11.9 Short Answer Problem 10 (b) 130 a. Draw two new AE curves in figure 11.8 for the price levels of 100 and 120. What are the equilibrium levels of aggregate expenditures for these two price levels? Label as 'b' the equilibrium point when the price level is 100 and 'c' as price level is 120. 120 b. Use figure 11.8 to obtain three points 'a', 'b' and 'c' on the aggregate demand curve. Plot these three points on figure 11.9. Assume that the aggregate demand curve is linear and draw the AD curve on figure 11.9. Figure…
Price level (GDP price Index 2012-100) Pocential AS 130 GDP 120 110 100 90 AD 19.0 195 20.0 20.5 21.0 21.5 Real GDP (trillons of 2012 dollars) In the figure above, the economy is at an equilibrium with real GDP of $20 trillion and a price level of 110. As the economy moves toward its ultimate equilibrium, the curve shifts because O a. aggregate supply; leftward; the money wage rate rises O b. aggregate supply; rightward; the money wage rate falls O c. aggregate demand; leftward; the money wage rate rises d. potential GDP; leftward; the money wage rate falls O e. aggregate demand; rightward; the money wage rate falls
Suppose an economy can be represented by the folowing table, in which employment is in millons of workers and GDP and AE are expressed in billions of dollars: Employment 100 Real GDP Aggregate Expenditures 1275 1350 1425 1500 1575 1650 1200 105 1300 1400 1500 1600 1700 110 115 120 125 fut employment is 120 milion workers? What is its what kind of expenditure oap exists size? Suppose government spending, taxes, and net exports ane all independent of the level of rcal GDP. What is the multplier an ths economy? below the econemy's potential, what is the size of the recessionary expenditure qapt
Calculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth and enter the value in trillions of dollars. Components of GDP on the Demand Side (in trillions of dollars) Consumption Investment Government spending Exports Imports Provide your answer below: trillion Total GDP 12.9 3.8 4.2 3.0 4.2 ?
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The aggregate supply curve shows the relationship between the price level and the: O potential GDP in the economy. O total quantity of output that suppliers collectively produce. total quantity of output that buyers collectively plan to purchase. equilibrium GDP in the economy.
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Browser Real GDP Rate of Wage Change Economy A 300 -1.0% Economy B 320 -0.5% Economy C 340 0% Economy D 360 +3.5% Economy E 380 +6.0% TABLE 24-1 Refer to Table 24-1. Which of the following statements best describes the situation facing Economy B? a) There is an inflationary gap of $40 billion and wages are rising. b) There is a recessionary gap of $40 billion and wages are falling slowly. c) There is no output gap and wages are stable. d) There is a recessionary gap of $20 billion and wages are falling slowly. e) There is an output gap of $20 billion and wages are rapidly adjusting.