MACROECONOMICS
14th Edition
ISBN: 9781337794985
Author: Baumol
Publisher: CENGAGE L
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Question
Chapter 5, Problem 3TY
To determine
(a)
Whether $50,000 payment to carpenter to build a garage will be included in
To determine
(b)
Whether $10,000 worth of raw materials used in the building of a garage for own usage will be counted in GDP or not. Whether the final value of $50,000 will be included in the GDP or not.
To determine
(c)
Whether a garage worth $50,000 built from woods will be counted in GDP or not.
To determine
(d)
Whether the sale and purchase of old and new houses respectively will be included in GDP or not.
To determine
(e)
Whether the purchase of used computers will be included in GDP or not.
To determine
(f)
Whether the purchase of a new mainframe computer will be included in GDP or not.
To determine
(g)
Whether the $100 amount that is won from playing in a casino will be included in GDP or not.
To determine
(h)
Whether $100 made in the stock market will be included in GDP or not.
To determine
(i)
Whether the sale of used economics textbook will be included in GDP or not.
To determine
(j)
Whether the purchase of a new economics textbook will be included in GDP or not.
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Refer to the attached Wk 3 Graph for this assignment. The graph shows an increase in demand (shifting of the demand curve from D1 to D2). Choose an application or situation in the economy or a specific economic situation to describe this graph. Take into consideration the impact on quantity and price in your analysis.
Given your analysis, what would cause the situation to go the opposite way? What would cause the situation to go further into the same direction?
Click on the link to study the Economics in the News. Then answer the following questions.
120-
118-
3. Use the AS-AD model to show the changes in aggregate demand and aggregate supply that occurred in
2016 and 2017 that brought the economy to its situation in mid-2017.
The graph shows the U.S. economy in the second quarter of 2016.
Draw and label the long-run aggregate supply curve in 2017.
Draw and label the aggregate demand curve in 2017.
Draw a point at the short-run macroeconomic equilibrium in the second quarter of 2017.
116-
114-
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Price level (GDP deflator, 2009=100)
LAS 16
112-
110-
108-
106-
104-
102-
$16.7
100-
16.6
16.7 16.8 16.9 17.0
SAS 16
= SAS17
AD 16
17.1
17.2
17.3
Real GDP (trillions of 2009 dollars)
>>> Draw only the objects specified in the question.
LV
☑
Price level (GDP deflator, 2009=100)
Fed Raises Rates As Job Gains, Firming Inflation Stoke Confidence
The U.S. Federal Reserve raised interest rates on Wednesday. The rate rise was the second in three months.
This second rise comes in an economy that is growing faster and creating jobs at a more rapid pace. These
gains are accompanied by a rising inflation rate.
140-
130-
Source: Reuters, March 15, 2017
Describe the process by which the Fed's action reported in the news clip flows through the economy.
120-
...
110-
LAS
SAS
→
☑
When the Fed raises the interest rate,
A. aggregate demand decreases and short-run aggregate supply increases, and the price level falls
B. aggregate demand increases and real GDP increases
C. aggregate demand decreases and the price level falls
D. short-run aggregate supply increases and the price level falls
The graph shows the long-run aggregate supply curve and the short-run aggregate supply curve.
Draw the AD curve to illustrate the state of the economy…
Chapter 5 Solutions
MACROECONOMICS
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