Homework Answers
"C"
An increase in the government expendituer will increase the income of the people and shift the aggregate demand curve to the right, that represents an increase in the GDP and the price level. Government expenditure is part of aggregate demand and any icrease in the aggregate demand will increase the income in the economy.
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1. In AS/AD model, an increase in government's expenditure will: a) Decrease the interest rate b)...
Suppose there is a decrease in interest rates. Using the AD-AS model and starting at a...
Suppose there is a decrease in interest rates. Using the AD-AS model and starting at a long-run equilibrium, what would be the short-run effect? Group of answer choices A . A decrease in Real GDP, a decrease in the GDP Deflator B. No change in Real GDP, an increase in the GDP Deflator C. An increase in Real GDP, an increase in the GDP Deflator D. No change in Real GDP, a decrease in the GDP Deflator
The term "crowding out" relates to the decrease in O A. consumption expenditure from an increase...
The term "crowding out" relates to the decrease in O A. consumption expenditure from an increase in investment B. the real interest rate from a government budget deficit C. private investment from a government budget deficit. O D. saving from an increase in disposable income. Click to select your answer.
Just need the answers please answer in 10 minutes A decrease in the saving rate will...
Just need the answers please answer in 10 minutes A decrease in the saving rate will not affect which of the following variables in the long-run? a. The level of investment. b. Y/N c. The growth rate of output. d. K/N 1 points QUESTION 2 A reduction in the saving rate starting from a steady-state with more capital than the Golden Rule causes investment tom _______ in the transition to the new steady-state. a. first decrease then increase b....
Why is the AD curve downward? sloping pick one answer below: A. The higher interest rate...
Why is the AD curve downward? sloping pick one answer below: A. The higher interest rate produced by a lower price level leads to more consumption? spending, investment? spending, and net exports. B. An increase in the price level decreases real money? balances, which raises the interest rate. The higher interest rate decreases consumption? spending, investment? spending, and net exports. C. AD slopes downward for the same reasons the demand for an individual good slopes? downward: because of income and...
Question 9 a) An increase in potential output in the AD-AS supply model will in the...
Question 9 a) An increase in potential output in the AD-AS supply model will in the long run lead to what? A. None of the other options B. No change in output and an increase in inflation relative to the initial equilibrium C. An increase in output and an increase in inflation relative to the initial equilibrium D. A decrease in output and a decrease in inflation relative to the initial equilibrium b) Consider an AD-AS model with AD curve...
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply...
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply causes: A) a rightward shift of the AD curve and then a leftward shift of the SRAS curve. B) a rightward shift of the AD curve and then a rightward shift of the SRAS curve. C) a leftward shift of the AD curve and then a leftward shift of the SRAS curve. D) a leftward shift of the AD curve and then a rightward...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
1. IS-MP-AD-IA model. In December 2017, the U.S. President and Congress passed a substantial decrease in...
1. IS-MP-AD-IA model. In December 2017, the U.S. President and Congress passed a substantial decrease in taxes. Assume that the U.S. economy starts out at potential output at the end of 2017 a) What is the effect of the tax cut on the IS and MP curves in the short run? b) According to the IS-MP model, what would happen to output and the real interest rate in c) What would happen to the AD and IA curves in the...
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T...
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y 1 = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level of national income....
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government...
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
The term "crowding out" relates to the decrease in O A. consumption expenditure from an increase in investment B. the real interest rate from a government budget deficit C. private investment from a government budget deficit. O D. saving from an increase in disposable income. Click to select your answer.
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply causes: A) a rightward shift of the AD curve and then a leftward shift of the SRAS curve. B) a rightward shift of the AD curve and then a rightward shift of the SRAS curve. C) a leftward shift of the AD curve and then a leftward shift of the SRAS curve. D) a leftward shift of the AD curve and then a rightward...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
1. IS-MP-AD-IA model. In December 2017, the U.S. President and Congress passed a substantial decrease in taxes. Assume that the U.S. economy starts out at potential output at the end of 2017 a) What is the effect of the tax cut on the IS and MP curves in the short run? b) According to the IS-MP model, what would happen to output and the real interest rate in c) What would happen to the AD and IA curves in the...
A5-10. Suppose the following aggregate expenditure model describes an economy: C = 100 + (5/6)Yd T = (1/5)Y 1 = 200 G = 400 X = 300 IM = (1/3)Y where C is consumption, Yd is disposable income, T is taxes, Y is national income, I is investment, G is government spending, X is exports, and IM is imports. (a) Derive a numerical expression for aggregate expenditure (AE) as a function of Y. Calculate the equilibrium level of national income....
QUESTION 12 In the aggregate expenditure model if the government of Pasedonia decides to increase government spending by $ 100 billion and to finance this increase in government spending the government of Pasedonia increases taxes by $ 100 billion what effect will this have on the economy? (assume MPC=0.75) O A GDP stays the same OB GDP increases by $ 100 billion OC. GDP will increase by $ 400 billion D.GDP will decrease QUESTION 13 An example of an automatic...
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