Unit 3 TestAssume the US economy is currently at long run equilibrium.a. Draw a correctly labelled graph of aggregate demand and aggregate supplyand show each of the followingi. The long run aggregate supply curveii. The current equilibrium output and price levels, labelled as Ye and Plerespectivelyb. Assume the government increases spending on national defense withoutrasing taxes.i. On your graph from part a) show how the government action affectsaggregate demandii. How will this government action affect the unemployment rate in theshort run? ExplainA

The question is asking to illustrate the current state of the US economy in long run equilibrium…

Answered: Unit 3 Test Assume the US economy is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 6 Which one of the following methods predicts the amount by which the value of a firm will change if a project is accepted? O Payback O Profitability index O Net present value O Internal rate of return O Discounted payback
Assume Country X has an electricity market with supply and demand being given below: Qp = -Pp + 200 Qs = -3Ps + 300 Part C- horizontally-integrated market If the government decides to reform the electricity market so that there are a number of power plant firms as well as a number of electricity distribution firms. The electricity market will now be controlled by a regulator using an auction system. A sample of the bids is given by the table below: Electricity Producers Electricity Distribution Asking price / KWh quantity/KWh Asking price / KWh quantity/KWh 0.74 25 0.56 30 0.32 20 0.34 60 0.46 35 2$ 0.55 25 0.53 25 0.64 25 0.64 30 2$ 0.43 40 By studying the bids, 1· Find the range of the equilibrium market price 2. Find the equilibrium market quantity 3. Find the total welfare
5) Which of the following will cause a movement from one point on an AD curve to another point on the same AD curve? a) a change in government expenditures b) a change in the price level c) a change in net exports d) all of the options provided 6) Here is a consumption function: C = CO + MPC(Yd). If MPC is 0.80, then we know that a) as Co rises by $0.80, Yd rises by $1. b) Yd rises by $0.80. c) as Yd rises by $1. Co rises by $0.80. d) as Yd rises by $1, C rises by $0.80. 7) An aggregate demand (AD) curve shows the a) none of the options provided is correct b) quantity of output that people are willing and can afford to buy at different price levels, ceteris paribus c) quantity of output that people are willing as well as able to produce and sell at different price levels, ceteris paribus. d) value of a particular good that people are willing and able to buy at a particular price, ceteris paribus. d) value of a particular good that people are willing and able to buy at a particular…
9 A _____currency is one whose value is set primarily by market forces of supply and demand A. Pegged B. Floating c. Managed D. Depreciated
13 Which of the following would not be expected to affect the decision of whether to undertake an investment? A. Sales reductions in other products caused by this investment B. Income tax rates C₁ Estimates of inflation rates D Cost of the feasibility study that was conducted for this project OA O B O C OD
Fill in the Table representing these data. Assume that the tax rate is 0.4 of national income; the MPC out of the after-tax income is 0.8; investment is $2,000; government spending is $1,000; exports are $2,000 and imports are 0.05 of after-tax income. What is the equilibrium level of output for this economy? National Income After-tax Consumption I+G+X Income Minus Imports Aggregate Expenditures

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