What are the costs associated with large volatility in GDP?      bouts of low taxes and high government expenditures   bouts of high GDP growth and low inflation rate   bouts of high interest rates and high national debt   bouts of high inflation and high unemployment rate

Q: Suppose that a federal election is called at a time when the economy is experiencing a recessionary…

A: The objective of the question is to understand the impact of two different economic policies - one…

Q: What is more appropriate to help stimulate economic growth; consumption or investment demand? What…

A: Economic growth refers to an increase in the production of economic goods and services for a period…

Q: How do consumption and investment spending affect aggregate expenditures and output over the…

A: A. The aggregate expenditure is the summation of all the expenditures made by the economic agents in…

Q: If you calculate GDP by adding together the final demands of consumers, business firms, the…

A: The term ‘GDP’ or gross domestic product refers to the market value of all services and commodities…

Q: Which of the following is a leakage from the circular flow of income and expenditure in South…

A: Leakage is something which lowers the income across the economy (outflow of income) and injection is…

Q: An overheated economy is most likely to result in: price stability high inflation stagflation…

A: A country's economy often overheats when supply is less than the demand. The price of goods and…

Q: Suppose real GDP is $5,361 billion, taxes collected by the government are $528 billion, government…

A: Formula:

Q: In a closed economy, subsistence consumption is 10 billions, households spend 60% of their net…

A: Given; Subsistence consumption=10 billion Investment= 40 billion Tax= 20 billion Government…

Q: Research past recessions in the US economy. Analyze why the recessions occurred, the societal and…

A: A decrease in the economic activity in an economy is referred to as recession. When an economy is in…

Q: Question 2 An open economy is described by the following system of macroeconomic equations, in which…

A: Calculating the private disposable income;…

Q: True/False  An increase in savings implies a decrease in consumption and therefore a decrease in…

A: The function of Income is given by Y= C+S, which means income(Y) is a combination of savings and…

Q: Explain how the current level of investment depends on the following factors: 1) the current level…

A: The expenditure which is incurred in the hope of earning higher returns in the future is known as…

Q: ecognize why economists believe that economic problems such as “shocks” and “sticky prices” are…

A: The stability of GDP is one of the primary attributes of economic growth. But, often GDP fluctuates…

Q: Billions of Dollars Gross private domestic investment $2,200 Depreciation $1,887 Exports $2,820…

A: Answer: GDP calculation by expenditure approach: This approach measures the GDP as a sum of total…

Q: QUESTION 7 In reality, AD rarely O decreases; increases at a pace much slower than potential GDP O…

A: Aggregate demand shows the inverse relationship between price and quantity demanded. It is downward…

Q: the information in the table to answer the following questions. All numbers are in billions of 2012…

A: [Note: As the answer of equilibrium GDP is correct, the answer of MPC only is given]It refers to the…

Q: Examine the fundamental causes of a nation's business cycle fluctuations. Also, examine the…

A: In an economy, the fall or rise in the production output of commodities and services are described…

Q: Do you think there is a predictable relationship between the business cycle and aggregate investment…

A: The fluctuation in the economic activity is tracked by the business cycle. In an economy, the fall…

Q: How do households dissave?  Where do they get the money to finance their extra consumption?  Can…

A: Dissaving refers to the activity of spending more amount than what is earned.

Q: During recessions investment   falls by a larger percentage than GDP. falls by about the same…

A: Any economy while moving towards the growth, registered four varied kinds of stages, namely peak,…

Q: Which of the following will not cause an increase in equilibrium GDP? a) an increase in government…

A: GDP is the value of final goods and services produced in the economy within a given period of time.

Q: f inventories are increasing, what part of the business cycle could we be entering? Group of answer…

A: A business cycle is a cycle of fluctuations in the GDP around its long-term growth rate. It is…

Q: explain the importance of the loanable funds market to basic GDP in a macroeconomy.

A: In modern macro economy, loanable funds market is a big source of national GDP because here huge…