Economics: Principles and Policy (MindTap Course List)
13th Edition
ISBN: 9781305280595
Author: William J. Baumol, Alan S. Blinder
Publisher: Cengage Learning
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Question
Chapter 26, Problem 1TY
To determine
Determine the equilibrium level of
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Use the following information to complete the calculations.
C = 15235 + 0.67Y
I = 8777
G = 3425
NX = -551
What is the value of autonomous expenditure (AE)? Round your answer to the nearest dollar.
AE: $
Calculate the equilibrium level of GDP. Round your answer to the nearest dollar.
GDP: $
We have obtained the following information about Real GDP in the U.S. economy from 1973:01
through 1975:Q++Data has been provided by the Bureau of Economic Analysis (BEA):
Real GDP
(billions of chained 2012 $)
$5,646.3
$5,707.8
$5,677.7
$5,731.6
$5,682.4
$5,695.9
$5,642.0
$5,620.1
$5,551.7
$5,591.4
$5,687.1
$5,763.7
Year
1973
1974
1975
Quarter
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
A. Create a graph of the above Real GDP data and label the phases of the Business Cycle
(Peak, Trough, Recession, Recovery/Expansion).
B. In what quarter did the U.S. economy reach a business cycle peak?
C. In what quarter did the U.S. economy reach the trough of the business cycle?
D. What was the percent decline in Real GDP from the business cycle peak to the trough?
RGDP trough - RGDP peak
Hint: Economic Growth Rate =
x 100
RGDP peak
Calculate the four components of aggregate expenditure and GDP for the following economy using data from the table below.
Instructions: Enter your responses as whole numbers. If you are entering any negative numbers, be sure to include a negative (-) sign
in front of those numbers.
Consumption expenditures
Exports
Government purchases of goods and services
Construction of new homes and apartments
Sales of existing homes and apartments
Imports
GDP
Beginning-of-year inventory stocks
End-of-year inventory stocks
Business fixed investment
Government payments to retirees
Household purchases of durable goods
Consumption expenditures: $
Investment expenditures: $
Government Purchases: $
Net Exports: $
GDP: $
$800
$50
$200
$200
$200
$125
$100
$100
$100
$100
$150
Chapter 26 Solutions
Economics: Principles and Policy (MindTap Course List)
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