EBK ECONOMICS
EBK ECONOMICS
13th Edition
ISBN: 8220106799642
Author: PARKIN
Publisher: PEARSON
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Chapter 27, Problem 25APA

(a)

To determine

Identify the main features of the U.S economy in the second quarter of 2017.

(b)

To determine

Identify if the U.S. economy has a recessionary gap of inflationary gap in 2017.

(c)

To determine

Illustrate the Figure to show the changes in aggregate demand and aggregate supply that had occurred in 2016 and 2017 which brought the economy to its situation in mid-2017.

(d)

To determine

Illustrate Figure using the aggregate demand and aggregate supply model to show the changes in aggregate demand and aggregate supply when economy resorted its full employment. 

(e)

To determine

Illustrate Figure using the aggregate demand and aggregate supply model to show the changes in aggregate demand and aggregate supply when the government increased expenditure on goods and services to restore its full employment.

(f)

To determine

Illustrate Figure using the aggregate demand and aggregate supply model to show the changes in aggregate demand and aggregate supply in short-run and long-run when the economy moved into an inflationary gap.

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Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics & criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health and criminology professors all have the same level of health. In 2020, every professor was offered a full insurance contract with no premium. In 2021, HU charged any employee who wanted to keep health insurance the actuarially fair premium based on 2020 expenditures. This premium would be equal to and, as a result,professors dropped their coverage in 2021. _ 2020 2021 Insured? Avg. Expenditures Insured? Avg. Expenditures Economics Professors Criminology Professors Yes Yes $25,000 $15,000 000000 $15,000; criminology $25,000; econ $20,000; econ $15,000; econ $20,000; criminology $25,000; criminology ??? $28,000 ??? $10,000
Consider the table below, which has data on insurance status and medical expenditures for different types of professors at Hypothetical University (HU), economics & criminology professors. Assume that there are an equal number of economics and criminology professors. Assume further that econ professors all have the same level of health and criminology professors all have the same level of health. There is evidence of 2021 Insured? Avg. Expenditures Insured? Avg. Expenditures 2020 Economics Professors Criminology Professors Yes. Yes $25,000 $15,000 0000 ??? ??? $28,000 $10,000 I. moral hazard because in 2021 criminology professors dropped their coverage and health expenditures went down. II. adverse selection because in response to rising premiums after 2020, the professors with lower health expenditure dropped coverage Both I and II neither I nor II
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