New Semester Started
Get
50% OFF
Study Help!
--h --m --s
Claim Now
Question Answers
Textbooks
Find textbooks, questions and answers
Oops, something went wrong!
Change your search query and then try again
S
Books
FREE
Study Help
Expert Questions
Accounting
General Management
Mathematics
Finance
Organizational Behaviour
Law
Physics
Operating System
Management Leadership
Sociology
Programming
Marketing
Database
Computer Network
Economics
Textbooks Solutions
Accounting
Managerial Accounting
Management Leadership
Cost Accounting
Statistics
Business Law
Corporate Finance
Finance
Economics
Auditing
Tutors
Online Tutors
Find a Tutor
Hire a Tutor
Become a Tutor
AI Tutor
AI Study Planner
NEW
Sell Books
Search
Search
Sign In
Register
study help
business
dynamic macroeconomics
Macroeconomics For Today 9th Edition Irvin B. Tucker - Solutions
Beginning from long-run equilibrium at point E1 in Exhibit A-9, the aggregate demand curve shifts to AD2. The real GDP and price level (CPI) in shortrun equilibrium will bea. $12 billion and 200.b. $8 billion and 250.c. $8 billion and 150.d. $12 billion and 250.
Given the shift of the aggregate demand curve from AD1 to AD2 in Exhibit A-9, the real GDP and price level (CPI) in long-run equilibrium will bea. $8 billion and 150.b. $12 billion and 200.c. $8 billion and 250.d. $8 billion and 200.
As shown in Exhibit A-9, and assuming the aggregate demand curve shifts from AD1 to AD2, the full-employment level of real GDP isa. $12 billion.b. $8 billion.c. $150 billion.d. Unable to determine.
Which of the following is the most likely to cause a leftward shift in the long-run aggregate supply curve?a. An increase in labor.b. An increase in capital.c. An advance in technology.d. Destruction of resources.
In Exhibit A-8, the self-correcting AD/AS model predicts that the long-run result of the decrease from AD1 to AD2 will be a (an)a. higher price level and higher unemployment rate.b. lower price level and higher unemployment rate.c. unchanged price level and full employment.d. lower price level and
In Exhibit A-8, the self-correcting AD/AS model theory is that in the long run the economy willa. remain where SRAS intersects AD1.b. shift to the intersection of AD2 and SRAS.c. shift to the intersection of AD2 and LRAS.d. shift to the intersection of AD2 and a new leftward-shifted SRAS.
In Exhibit A-8, the self-correcting AD/AS model argument is that, if D2 equals SRAS, competitiona. from unemployed workers causes an increase in nominal wages and a rightward shift in SRAS.b. from unemployed workers causes a rightward shift in LRAS.c. among firms for workers increases nominal wages
In Exhibit A-8, the intersection of AD2 with SRAS indicatesa. short-run equilibrium.b. long-run equilibrium.c. that the economy is operating at full employment.d. that prices and wages are inflexible.
In Exhibit A-8, the intersection of AD1 with SRAS indicatesa. short-run equilibrium.b. long-run equilibrium.c. that the economy is not operating at full employment.d. that prices and wages are inflexible.
An increase in aggregate demand in the long-run will result in __________ in full employment real GDP and __________ in the price level.a. no change; an increaseb. an increase; no changec. a decrease; no changed. no change; a decrease
An increase in nominal incomes of workers results in thea. aggregate demand curve shifting to the left.b. long-run aggregate supply curve shifting to the right.c. short-run aggregate supply curve shifting to the left.d. short-run aggregate supply curve shifting to the right.
Graphically, long-run macro equilibrium occurs at thea. midpoint of the aggregate demand curve.b. intersection of the aggregate demand and long-run aggregate supply curves regardless of the short-run aggregate supply curve.c. midpoint of the long-run aggregate supply curve.d. intersection of the
The long-run aggregate supply curve is based on the assumption thata. both the price level and nominal incomes are fixed.b. prices are flexible after one year.c. both the price level and nominal incomes change by the same percentage.d. potential GDP is undermined.
An assumption of the short-run aggregate supply curve is that it is a period of time during whicha. knowledge is complete.b. wages are fixed.c. wages are constant for under one year.d. prices firms charge for products are fixed.
If nominal wages and salaries are fixed as firms change product prices, the short-run aggregate supply curve isa. vertical.b. horizontal.c. negatively sloped.d. positively sloped.
Nominal wages are assumed fixed in the short run becausea. workers have wages stated in their contracts.b. of minimum wage laws.c. workers are unaware of short-run changes in their real wages.d. All of the answers above are correct.e. None of the answers above are correct.
In the short run, an increase in the price level causes which of the followinga. A rightward shift in the aggregate demand curve.b. A leftward shift in the short-run aggregate supply curve.c. A rightward shift in the short-run aggregate supply curve.d. A movement upward along the short-run
The short-run aggregate supply curve (SRAS) is the amount of real GDPa. produced at various price levels.b. produced at various savings rate levels.c. purchased at various price levels.d. purchased at various saving rate levels.
In the short run for the self-correcting aggregate demand and supply model, nominal wages and salaries are assumed to bea. constant.b. sticky.c. inflexible.d. All of the answers above are correct.
Real GDP was approximately equal to potential GDP. In the third quarter, aggregate demand decreased to$9.83 trillion, and the price level rose to 103.Draw a graph of this recession.
In the first quarter of 2001, real GDP was $9.88 trillion, and the price level measured by the GDP chain price index was
The economy shown in Exhibit A-7 is initially in equilibrium at point E1, and the aggregate demand curve decreases from AD1 to AD2.Explain the long-run adjustment process.
Based on the assumptions of question 3, explain verbally the impact of an increase of $4 trillion in aggregate demand on short-run equilibrium.
Use the graph drawn in Question 1 and assume the initial equilibrium is E1. Next, assume aggregate demand increases by $4 trillion. Draw the effect on short-run equilibrium.
Using the graph from question 1 and assuming long-run equilibrium at $12 trillion, explain the impact of a 10 percent increase in workers’income.
The economy of Tuckerland has the following aggregate demand and supply schedules, reflecting real GDP in trillions of dollars:Price level (CPI)Aggregate demand Short-run aggregate supply 250 $4 $16 200 8 12 150 12 8 100 16 4a. Graph the aggregate demand curve and the short-run aggregate supply
Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is on the intermediate range of the aggregate supply curve, thena. both real GDP and the price level will fall.b. real GDP will fall and the price level will rise.c. real
An increase in the price level caused by a rightward shift of the aggregate demand curve is calleda. cost-push inflation.b. supply shock inflation.c. demand shock inflation.d. demand-pull inflation.
Assuming a fixed aggregate demand curve, a leftward shift in the aggregate supply curve causes a (an)a. increase in the price level and a decrease in real GDP.b. increase in the price level and an increase in real GDP.c. decrease in the price level and a decrease in real GDP.d. decrease in the
Other factors held constant, a decrease in resource prices will shift the aggregatea. demand curve leftward.b. demand curve rightward.c. supply curve leftward.d. supply curve rightward.
Along the classical or vertical range of the aggregate supply curve, a decrease in the aggregate demand curve will decreasea. both the price level and real GDP.b. only real GDP.c. only the price level.d. neither real GDP or the price level.
Macroeconomic equilibrium occurs whena. aggregate supply exceeds aggregate demand.b. the economy is at full employment.c. aggregate demand equals aggregate supply.d. aggregate demand equals the average price level.
Which of the following is not a range on the eclectic or general view of the aggregate supply curve?a. Classical range.b. Keynesian range.c. Intermediate range.d. Monetary range.
Classical economists believed that thea. price system was stable.b. goal of full employment was impossible.c. price system automatically adjusts the economy to full employment in the long run.d. government should attempt to restore full employment.
The popular theory prior to the Great Depression that the economy will automatically adjust to achieve full employment isa. supply-side economics.b. Keynesian economics.c. classical economics.d. mercantilism.
Which of the following will not shift the aggregate demand curve to the left?a. Consumers become more optimistic about the future.b. Government spending decreases.c. Business optimism decreases.d. Consumers become pessimistic about the future.
Which of the following will shift the aggregate demand curve to the left?a. An increase in exports.b. An increase in investment.c. An increase in government spending.d. A decrease in government spending.
The net exports effect is the inverse relationship between net exports and the__________ of an economy.a. real GDPb. GDP deflatorc. price leveld. consumption spending
The real balance effect occurs because a higher price level reduces the real value of people’sa. financial assets.b. wages.c. unpaid debt.d. physical investments.
When the supply of credit is fixed, an increase in the price level stimulates the demand for credit, which, in turn, reduces consumption and investment spending. This effect is called thea. real balance effect.b. interest-rate effect.c. net exports effect.d. substitution effect.
The aggregate demand curve is defined asa. the net national product.b. the sum of wages, rent, interest, and profits.c. the real GDP purchased at different possible price levels.d. the total dollar value of household expectations.
According to classical macroeconomic theory, if real GDP is at the full-employment level, then an increase in aggregate demand will result in which of the following changes in equilibrium?a. Real GDP will rise, but the price level will remain constant.b. Real GDP and the price level will both
According to Keynesian theory, if equilibrium real GDP is below the full-employment level, then an increase in aggregate demand will result in which of the following changes in equilibrium?a. Real GDP will rise, but the price level will remain constant.b. Real GDP and the price level will both
Which of the following correctly describes the aggregate supply curve?a. A curve that shows the level of real GDP demanded at different possible price levels.b. A curve that shows the level of real GDP produced at different possible price levels.c. A curve that shows the level of quantity supplied
Which of the following correctly describes the interest-rate effect?a. If the price level decreases, consumer purchasing power decreases, the demand for credit rises, interest rates rise, debt-financed borrowing decreases, and real GDP demanded falls.b. If the price level decreases, consumer
Which of the following reasons helps explain why the aggregate demand curve is downward sloping?a. The real balances effect: Consumers spend more on goods and services when the price level falls because lower prices increase consumer purchasing power.b. The producer-push effect: At less than full
Explain demand-pull inflation graphically using aggregate demand and supply analysis. Assess the impact on the price level, real GDP, and employment.
Explain cost-push inflation verbally and graphically, using aggregate demand and aggregate supply analysis. Assess the impact on the price level, real GDP, and employment.
What shifts in aggregate supply or aggregate demand would cause each of the following conditions for an economy?a. The price level rises, and real GDP rises.b. The price level falls, and real GDP rises.c. The price level falls, and real GDP falls.d. The price level rises, and real GDP falls.e. The
Assume an economy operates in the intermediate range of its aggregate supply curve. State the direction of shift for the aggregate demand or aggregate supply curve for each of the following changes in conditions. What is the effect on the price level? On real GDP? On employment?a. The price of
In which direction would each of the following changes in conditions cause the aggregate supply curve to shift? Explain your answers.a. The price of gasoline increases because of a catastrophic oil spill.b. Labor unions and all other workers agree to a cut in wages to stimulate the economyc. Power
Assume the aggregate demand and aggregate supply curves intersect at a price level of 100.Explain the effect of a shift in the price level to 120 and to 50.
Consider this statement: “Equilibrium GDP is the same as full employment.” Do you agree or disagree? Explain.
Identify the three ranges of the aggregate supply curve. Explain the impact of an increase in the aggregate demand curve in each segment.
In which direction would each of the following changes in conditions cause the aggregate demand curve to shift? Explain your answers.a. Consumers expect an economic downturn.b. A new U.S. president is elected, and the profit expectations of business executives rise.c. The federal government
Explain the theory of the classical economists that flexible prices and wages ensure that the economy operates at full employment.
Explain why the aggregate demand curve is downward sloping. How does your explanation differ from the reasons behind the downwardsloping demand curve for an individual product?
Use the aggregate expenditures model and assume an economy is in equilibrium at $5 trillion, which is $250 billion above full-employment GDP. If the marginal propensity to consume (MPC) is 0.60, full-employment GDP can be reached if government spendinga. decreases by $60 billion.b. decreases by
Using the aggregate expenditures model, assume the aggregate expenditures (AE) line is above the 45-degree line at full-employment GDP. This vertical distance is called a (an)a. inflationary gap.b. recessionary gap.c. negative GDP gap.d. marginal propensity to consume gap.
To close the recessionary gap and achieve fullemployment real GDP as shown in Exhibit 10, the government should cut taxes bya. $.60 trillion.b. $1 trillion.c. $2 trillion.d. $3 trillion.
To close the recessionary gap and achieve fullemployment real GDP as shown in Exhibit 10, the government should increase spending bya. $1.0 trillion.b. $1.2 trillion.c. $2.0 trillion.d. $3.0 trillion.
In Exhibit 10, the spending multiplier for this economy is equal toa. 1 2 3b. 2 1 2c. 3.d. 5.
The equilibrium level of real GDP is $1,000 billion, the full-employment level of real GDP is $1,250 billion, and the marginal propensity to consume(MPC) is 0.60. The full-employment target can be reached if government spending is increased bya. $60 billion.b. $100 billion.c. $250 billion.d. held
Assume an economy is in recession and the marginal propensity to consume (MPC) decreases then which of the following is true?a. It takes the same increase in autonomous aggregate expenditures to shift the aggregate expenditure curve upward to the fullemployment real GDP level.b. It takes a smaller
If the equilibrium level of real GDP is $100,000 below the full-employment level of real GDP and the spending multiplier is 4, how much of an increase in autonomous aggregate expenditures (such as government spending) is required to move the equilibrium to the full-employment level of real GDP?a.
Keynes’ criticism of the classical theory was that the Great Depression would not correct itself. The multiplier effect would restore an economy to full employment ifa. government would follow a “least government is the best government” policy.b. government taxes were increased.c. government
If the marginal propensity to consume (MPC) is 0.90, a $100 billion increase in planned investment expenditure, other things being equal, will cause an increase in equilibrium output ofa. $90 billion.b. $100 billion.c. $900 billion.d. $1,000 billion.
If the marginal propensity to consume (MPC) is 0.75, a $50 billion decrease in government spending would cause equilibrium output toa. increase by $50 billion.b. decrease by $50 billion.c. increase by $200 billion.d. decrease by $200 billion.
If the marginal propensity to consume (MPC) is 0.80, the value of the spending multiplier isa. 2.b. 5.c. 8.d. 10.
If the value of the marginal propensity to consume (MPC) is 0.50, the value of the spending multiplier isa. .50.b. 1.c. 2.d. 5.
The spending multiplier is defined asa. 1/(1 marginal propensity to consume).b. 1/(marginal propensity to consume).c. 1/(1marginal propensity to save).d. 1/(marginal propensity to consume þmarginal propensity to save).
John Maynard Keynes proposed that the multiplier effect can correct an economic depression.Based on this theory, an increase in equilibrium output would be created by an initiala. increase in investment.b. increase in government spending.c. decrease in government spending.d. Both answersa. andb.
There will be unplanned inventory investment accumulation whena. aggregate output (real GDP) equals aggregate expenditures.b. aggregate output (real GDP) exceeds aggregate expenditures.c. aggregate expenditures exceed aggregate output (real GDP).d. firms increase output.
The net exports line can bea. positive.b. negative.c. zero.d. any of the answers above.
Which of the following most completely describes the workings of the aggregate expenditures model?a. If aggregate expenditures are less than aggregate output, then there is unplanned inventory accumulation, and real GDP will decrease.b. If aggregate expenditures are greater than aggregate output,
Which of the following is the correct formula for the spending multiplier?a. (1MPC)/1.b. 1/(1MPC).c. MPS/(1MPC).d. 1/MPC.
The aggregate expenditures function (AE) represents which of the following?a. The consumption function only.b. The investment demand curve only.c. Government expenditures only.d. Net exports only.e. All of the answers above combined.
Assume an economy is in recession with a MPC of 0.75 and there is a GDP gap of $100 billion.How much must government spending increase to eliminate the gap? Instead of increasing government spending by the amount you calculate, what would be the effect of the government cutting taxes by this amount?
First, use the data given in question 1, and assume the level of autonomous investment is $50 billion.If the full-employment level of output is $525 billion, what is the equilibrium level of output and employment? Does a recessionary gap or an inflationary gap exist? Second, assume the level of
Suppose autonomous investment increases by$100 billion and the MPC is 0.75.a. Use the following table to compute four rounds of the spending multiplier effect:Round Components of total spending New consumption spending (billions of dollars)1 Investment $2 Consumption 3 Consumption 4 Consumption
Assume the MPC is 0.90 and autonomous investment increases by $500 billion. What will be the impact on real GDP?
How are changes in the MPC, changes in the MPS, and the size of the multiplier related?Answer the following questions:a. What is the multiplier if the MPC is 0? 0.33?0.90?b. Suppose the equilibrium real GDP is $100 billion and the MPC is 4/5. How much will the equilibrium output change if
Use the aggregate expenditures model to demonstrate the multiplier effect.
Explain the determination of equilibrium real GDP by drawing an abstract graph of the aggregate expenditures model. Label the aggregate expenditures line AE and the aggregate output line Y. Explain why the interaction of AE and Y determines the Keynesian equilibrium level of real GDP.
Using the data given in question 1, what is the impact of adding net exports? Let imports equal$75 billion, and assume exports equal $50 billion.What is the equilibrium level of employment and output?
Assume the level of autonomous investment is$100 billion and aggregate expenditures equal consumption and investment. Based on the following table, answer the questions below.a. Fill in the unplanned inventory column.b. Determine the MPC and MPS.c. If this economy employs a labor force of 40
As shown in Exhibit 8, break-even income occursa. at 0.b. between 0 and $5 trillion.c. where real disposable income is greater than$5 trillion.d. at $4 trillion.e. at $5 trillion.
As shown in Exhibit 8, the marginal propensity to save (MPS) isa. 0.40.b. 0.50.c. 0.67.d. 0.75.
As shown in Exhibit 8, dissaving occursa. at 0.b. between 0 and $5 trillion.c. where real disposable income is greater than$5 trillion.d. at $4 trillion.
As shown in Exhibit 8, saving occursa. at 0.b. between 0 and $5 trillion.c. where real disposable income is greater than$5 trillion.d. at $4 trillion.
As shown in Exhibit 8, autonomous consumption isa. 0.b. $1 trillion.c. $2 trillion.d. $4 trillion.e. $6 trillion.
In Exhibit 8, what is the households’ marginal propensity to consume (MPC)?a. 0.50.b. 0.60.c. 0.75.d. 0.80.
Which of the following changes produces a leftward shift in the investment demand curve?a. A wave of optimism about future profitability.b. Technological change.c. High plant capacity utilization.d. An increase in business taxes.
The investment demand curve represents the relationship between business spending for investment goods anda. GDP.b. interest rates.c. disposable income.d. saving.
An upward shift in the consumption function, other things being equal, could be caused by householdsa. becoming optimistic about the state of the economy.b. becoming pessimistic about the state of the economy.c. expecting future income and wealth to decline.d. None of the answers above are correct.
Which of the following changes produces an upward shift in the consumption function?a. An increase in consumer wealth.b. A decrease in consumer wealth.c. A decrease in autonomous consumption.d. Both answersb. andc. are correct.
Above the break-even disposable income for the consumption function, which of the following occurs?a. Dissaving.b. Saving.c. Neither answera. norb. is correct.d. Both answersa. andb. are correct.
John Maynard Keynes’s proposition that a dollar increase in disposable income will increase consumption, but by less than the increase in disposable income, implies a marginal propensity to consume that isa. greater than or equal to one.b. equal to one.c. less than one, but greater than zero.d.
The consumption function represents the relationship between consumer expenditures anda. interest rates.b. saving.c. the price level.d. disposable income.
Autonomous consumption isa. positively related to the level of consumption.b. negatively related to the level of consumption.c. positively related to the level of disposable income.d. independent of the level of disposable income.
Showing 4700 - 4800
of 5072
First
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
Step by Step Answers
Get 50% OFF
Study Help!
Claim Now
