The macroeconomic variables that would decline during recession and one variable that would rise during recession.

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Answer 1

Question

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

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Problem 3 You are given the following demand for European luxury automobiles: Q=1,000 P-0.5.2/1.6 where P-Price of European luxury cars PA = Price of American luxury cars P, Price of Japanese luxury cars I= Annual income of car buyers Assume that each of the coefficients is statistically significant (i.e., that they passed the t-test). On the basis of the information given, answer the following questions 1. Comment on the degree of substitutability between European and American luxury cars and between European and Japanese luxury cars. Explain some possible reasons for the results in the equation. 2. Comment on the coefficient for the income variable. Is this result what you would expect? Explain. 3. Comment on the coefficient of the European car price variable. Is that what you would expect? Explain.

Problem 2: A manufacturer of computer workstations gathered average monthly sales figures from its 56 branch offices and dealerships across the country and estimated the following demand for its product: Q=+15,000-2.80P+150A+0.3P+0.35Pm+0.2Pc (5,234) (1.29) (175) (0.12) (0.17) (0.13) R²=0.68 SER 786 F=21.25 The variables and their assumed values are P = Price of basic model = 7,000 Q==Quantity A = Advertising expenditures (in thousands) = 52 P = Average price of a personal computer = 4,000 P. Average price of a minicomputer = 15,000 Pe Average price of a leading competitor's workstation = 8,000 1. Compute the elasticities for each variable. On this basis, discuss the relative impact that each variable has on the demand. What implications do these results have for the firm's marketing and pricing policies? 2. Conduct a t-test for the statistical significance of each variable. In each case, state whether a one-tail or two-tail test is required. What difference, if any, does it make to…

Answer 2

Question

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

Answer 6

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

Answer 7

Chapter 33, Problem 1QR

To determine

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Answer 8

Expert Solution & Answer

Explanation of Solution

During the period of a recession, the economy will face the leftward shift in the Aggregate Demand and Aggregate Supply of the economy. When the AD and AS shifts leftwards, it would lead to the new equilibrium where the equilibrium output will be lower whereas the price level will be higher. Thus, during the period of recession in the economy, the real GDP of the economy and the investment spending or the consumption spending of the economy would fall which will lead to an increase in the unemployment of the economy.

Thus, the real GDP of the economy, the consumption spending and the investment spending would decline during the period of recession in the economy. The macroeconomic variable that increases during the period of recession is the unemployment rate.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Economics Concept Introduction

Concept introduction:

Economic fluctuations: They are the fluctuations in the level of national income of an economy which represents the growth or contraction in the economy in a financial year.

Recession: It is one important phase in the business cycle. This phase is the movement of the economy from the peak point of prosperity towards the depression which is the lower point of the economic business cycle.

Answer 12

Ch. 33.1 - Prob. 1QQ Ch. 33.2 - Prob. 2QQ Ch. 33.3 - Prob. 3QQ Ch. 33.4 - Prob. 4QQ Ch. 33.5 - Prob. 5QQ Ch. 33 - Prob. 1QR Ch. 33 - Prob. 2QR Ch. 33 - Prob. 3QR Ch. 33 - Prob. 4QR Ch. 33 - Prob. 5QR

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

The macroeconomic variables that would decline during recession and one variable that would rise during recession.

Explanation of Solution

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Chapter 33 Solutions