PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Question
Chapter 13, Problem 9P
(a)
To determine
Find the short-run equilibrium output of the economy described in problem 7 with zero net export.
(b)
To determine
Find the short-run equilibrium output of the economy when the net export rises to 100.
(c)
To determine
Find the short-run equilibrium output of the economy when the net export reduces to -100.
(d)
To determine
Explain the tendency of recessions and expansions to spread across countries using the findings.
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Hello Professor,
A rise in consumption in the economy would cause an increase in aggregate demand. Therefore, when consumers spend money on everyday goods and services, it not only helps to stimulate economic growth, but it could also present potential issues like unsustainable debt levels or inflation. I believe that it would be beneficial to consider such factors and adopt a purchasing strategy to help navigate the challenges posed by inflation or unsustainable debt levels.
First, do you think our business will be affected because inflation is rising? How?
Yes, I do believe that the business will be affected because of inflationary pressures. Inflation rising will affect the cost of goods, services, and labor, which could lead to higher operating expenses. The potential reduction of profit margin because of inflation could lead to a smaller percentage of revenue being retained as profit. Therefore, inflation rising will force us to raise prices for…
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Chapter 13 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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