Question: Nominal total consumption is given by the equation C = PNc, where P is the price level, N is population, and c is real

Nominal total consumption is given by the equation C = PNc, where

Nominal total consumption is given by the equation C = PNc, where P is the price level, N is population, and c is real per capita consumption. Consumption-to-output ratio is given by C/Y, where Y is nominal total GDP. Suppose the average growth rate of population is 3 percent, inflation rate is 2.5 percent, and real per capita consumption growth rate is 1.5 percent. Assume also that real per capita GDP growth rate is 2 percent. 3.a. What is the growth rate of real total consumption? 3.b. What is the growth rate of nominal total consumption? 3.c. What is the growth rate of real total GDP? 3.d. What is the growth rate of consumption-to-output ratio?

Step by Step Solution

★★★★★

3.41 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Answer Answen given C PNC C To tal Consm pton P PAice level N Populatoni 1D Comaumption to out... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Suppose that demand is given by the equation QD = 500 50P, where QD is quantity demanded, and P is the price of the good. Supply is described by the equation QS = 50+ 25P, where QS is quantity...

Suppose a current is given by the equation l = 1.80sin 210r, where l is in amperes and t in seconds. (a) What is the frequency? (b) What is the rms value of the current? (c) If this is the current...

Suppose the production function is given by the equation Q = LK. Graph the isoquants corresponding to Q = 10, Q = 20, and Q = 50. Do these isoquants exhibit diminishing marginal rate of technical...

1. The long-run aggregate supply curve is _____ (vertical/horizontal). 2. A decrease in material costs will shift the short-run aggregate supply _____. 3. Using the long-run aggregate supply curve, a...

Multiple Choice Questions: 1. As the price level increases, other things being equal, a. Aggregate demand decreases. b. The quantity of real gross domestic product demanded increases. c. The quantity...

True or False: 1. An expansionary policy can be thought of as an increase in the money supply or an increase in the interest rate. 2. A change in the nominal interest rate tends to change the real...

a. If long-run aggregate supply rate shocks do largely explain business fluctuation while the aggregate demand curve mostly stays fixed, then should prices be higher than usual or lower than usual...

Multiple Choice Questions: 1. The largest component of aggregate demand is? a. Government purchases. b. Net exports. c. Consumption. d. Investment. 2. A reduction in personal income taxes, other...

In the short run, what is the impact on the price level and Real GDP of each of the following? (a) An increase in consumption brought about by a decrease in interest rates; (b) A decrease in exports...

In the long run according to the quantity theory of money, if the money supply doubles, what happens to the price level? What happens to real GDP? In both cases, state the percentage change in either...

1. Which of the following statements is CORRECT with respect to total fixed costs, within the relevant range? a. They will remain the same as production levels change. b. They will increase as...

What do you understand by International Quality standards what is the importance of these standards in today s global market Write short notes on following International Quality standards ISO 9000...

10. Calculating Present Values (LO2) Normandin Inc. has an unfunded pension liability of $575 million that must be paid in 20 years. To assess the value of the firm's stock, financial analysts want...

Prepare an individual flexibility agreement for the personal trainers. Fill in the table below and consider the following: Members generally book training sessions between the hours of 9 am and 11 am...

Outline at least 3 issues related to flexible workforce arrangements and at least 1 strategy to deal with each issue.

Identify, highlight and name all the functional groups present in the following biomolecules. H H-C-OH H-C-NH, HO-C-H H-C-OH H-C-OH H-C-OH H-C-OH H H2OH D-Glucosamina 00- o- H,-C-H HO-P-O H C=C-COO H...

17. Will the following reaction be spontaneous at all temperatures, spontaneous at low temperatures, spontaneous at high temperatures, or non-spontaneous at all temperatures? AH

Which of the following occurs in the renal corpuscles? Multiple Choice micturition glomerular filtration tubular reabsorption tubular secretion elimination

Inflation is Group of answer choices An increase in relative prices of all goods and services. A rise in the price of every good but not any service. None of the Answers are Correct. A situation in...

PArt one. (1) (a) A monopolist has a demand curve given by P = 100 - Q and a total cost curve given by TC = 16 + Q2 . The associated marginal cost curve is MC = 2Q. Draw a supply and demand graph...

Assignment 01 (semester 2) Assignment 01 Unique number 730716 Closing date 30 August 2021 Content Learning units 1 and 2 of the Study Guide and the relevant chapters of the prescribed book Questions...

A. Exercise 1 - Slutsky equation 1. Assume there are two goods, 1 and 2. Illustrate graphically the Slutsky decomposition of a decrease in the price of good 1 under the assumption that it is a normal...

303Micro, help. 6. A firm in a competitive output market is unsure of what the ultimate product price will be at the time she has to make her output decision. She believes that with probability .5...

Topic 3.1 - Aggregate Demand (AD) 13. Canadians buy more Arnericanmade cars 14. Lower interest rates affect investment L L Part 3 - Making Connections- Read the quote regarding the Great Recession...