Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 33, Problem 9PA
Sub part (a):
To determine
Short run and long run effects of economic events on output and price.
Sub part (b):
To determine
Short run and long run effects of economic events on output and price.
Sub part (c):
To determine
Short run and long run effects of economic events on output and price.
Sub part (d):
To determine
Short run and long run effects of economic events on output and price.
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For each of the following scenarios predict how the price level and output will change over time from immediate impact to long-run impact. In each case, consider an economy that was initially producing at its level of potential output.
a. The government passes legislation that increases corporate taxes by 25%.
b. Economies around the globe are experiencing a time of prosperity and, as a result, demand for U.S. exports increases.
For each of the following events, explain the short-run and long-run effects on
output and the price level, assuming policymakers take no action. Analyze with
graphs!
b. The federal government increases spending on national defense.
government increases spending on national defense.
based on the statement above, explain the short-run and long-run effects on output and the price level, assuming policymakers take no action. Analyze with graphs!
Chapter 33 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Ch. 33.1 - Prob. 1QQCh. 33.2 - Prob. 2QQCh. 33.3 - Prob. 3QQCh. 33.4 - Prob. 4QQCh. 33.5 - Prob. 5QQCh. 33 - Prob. 1QRCh. 33 - Prob. 2QRCh. 33 - Prob. 3QRCh. 33 - Prob. 4QRCh. 33 - Prob. 5QR
Ch. 33 - Prob. 6QRCh. 33 - Prob. 7QRCh. 33 - Prob. 1QCMCCh. 33 - Prob. 2QCMCCh. 33 - Prob. 3QCMCCh. 33 - Prob. 4QCMCCh. 33 - Prob. 5QCMCCh. 33 - Prob. 6QCMCCh. 33 - Prob. 1PACh. 33 - Prob. 2PACh. 33 - Prob. 3PACh. 33 - Prob. 4PACh. 33 - Prob. 5PACh. 33 - Prob. 6PACh. 33 - Prob. 7PACh. 33 - Prob. 8PACh. 33 - Prob. 9PACh. 33 - Prob. 10PA
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- Suppose the people of Canada has reduced their spending on goods and services from the United States. What will be the effect on real GDP and the price level in the short run? In the long run? Show your results graphically.arrow_forwardWhich of the following is likely to result from a rapid rise in aggregate demand? Select one: a. Static living standards b. Increased unemployment c. Rising prices d. Surplus on the balance of paymentsarrow_forwardIf households decide to save a larger portion of their income, what effect would this have on the output, employment, and price level in the short run? What about the long run?arrow_forward
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