An economy can experience economic growth with no inflation if _______. A. it does not engage in international trade B. the government has a balanced budget C. aggregate demand increases at the same pace as potential GDP D. aggregate demand increases at a faster rate than potential GDP
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- (b) Assume that the household in an economy spend 75% of their extra income. Calculate the change of aggregate demand if government increase their spending by $150,000. (c) If prices keep rising, a nightmare scenario for the US economy is a real possibility New York (CNN Business) There's no denying it: Inflation is here. Consumer prices surged 7% over the past year. Housing prices have continued to soar, too. But the question on the minds of many economists and Wall Street strategists is whether something even worse could be in the cards: prices rising as the economy slows. Source: CNN Business, 12" January 2022. Examine the cause of stagflation, and how it affects the output and price level. (d) Based on part (c), what will happen to the output and price level if the US policymakers accommodate the shift in aggregate supply? State only one fiscal policy tool that the policymakers may use.uProvide 2 substantive Discussion Question's each week. postings to each of the 3 1. Describe the tools and components of supply-side policy. Provide 2 substantive postings to each of the 3 Discussion Question's each week. 2. What are the principal sources of economic growth? Provide 2 substantive postings to each of the 3 Discussion Question's each week. 3. Explain the policy tools necessary for accelerated growth.What are the important mechanisms that reverse the effects of a recession in a modern economy? (Check all that apply.) A. Labor supply increases due to an increase in real wages. B. The multipliers on wages and employment return to normal. C. Labor demand increases due to expansionary government policies. D. Labor demand increases due to market forces. What market forces might cause the labor demand curve to shift back to the right? (Check all that apply.) A. Technological advances encourage firms to expand their activities. B. The banking system recuperates and businesses are again able to use credit to finance their activities. C. Excess inventory has been sold off. D. Wage rigidity decreases.
- Suppose that the E.U. economy goes into an expansion. Canadian real GDP ________ and Canadian unemployment ________ in the short run. A. decreases; increases B. does not change; does not change C. decreases; decreases D. increases; increases E. increases; decreasesSuppose that the economy is initially in a steady state and that some of the nation's capital stock is destroyed because of a natural disaster or a war. a. Determine the long-run effects of this on the quantity of capital per worker and on output per worker. b. In the short run, does aggregate output grow at a rate higher or lower than the growth rate of the labour force? c. After World War II, growth in real GDP in Germany and Japan was very high. How do your results in parts (a) and (b) shed light on this historical experience?(a) Suppose the price level in an economy rises while the money wage rate remains constant. What happens to the quantity of real GDP supplied. How will this affect the aggregate supply or aggregate demand curve? What if the potential GDP increases? Which aggregate curve is affected and how? (b) Planned Real GDP Consumption Investment $1,000 $100 1,900 100 2,800 100 3,700 100 $1,000 2,000 3,000 4,000 Government Purchases Net Exports $150 -$50 150 -50 150 -50 150 -50 From the table data provided, answer the following questions. The numbers in the table are in billions of dollars. Show all calculations. a. What is the equilibrium level of real GDP? b. What is the Marginal Propensity to Consume? c. What is the multiplier value in this economy? d. If potential GDP is $4,000 billion, is the economy at full employment? If not, what is the condition of the economy? e. If the economy is not at full employment, by how much should government spending increase so that the economy can move to the…
- Optimism Imagine that the economy is in long-run equilibrium. Then, perhaps because improved international relations and increased confidence in policy makers, people become more optimistic about the future and stay this way for some time. Refer to Optimism. In the short run what happens to the price level and real GDP? Şelect one: a.the price level falls and real GDP rises. b.both the price level and real GDP fall. c.the price level rises and real GDP falls. d.both the price level and real GDP rise.1. The maximum amount of production that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation is called A) real GDP. B) nominal GDP. C) actual GDP. D) potential GDP. 2. Potential GDP is A) the maximum GDP that an economy actually achieves throughout its entire history. B) the level of GDP achieved during periods when 100 percent of the labor force is employed. C) a goal that can never be achieved by the economy. D) the maximum amount of GDP that can be produced while avoiding shortages of labor, capital, land, and entrepreneurship that would bring rising inflation. 3. The relationship between real GDP and potential GDP is that A) real GDP always equals potential GDP. B) real GDP never equals potential GDP. C) real GDP fluctuates about potential GDP. D) real GDP is always below potential GDP. 4. The income approach to measuring GDP sums together A) compensation of employees, rental income, corporate profits, net…good day kindly explain Given that Japan’s economy is currently in the expansion phase of the business cycle, which of the followingis most likely to occur in Japan?A. Rising unemployment and economic contraction.B. A decrease in consumer spending and business investments.C. Increasing economic activity, rising employment, and growing consumer confidence.D. A decrease in government spending and fiscal austerity measures.
- 10 For this question, assume that all factors that effect economic growth remain constant. Suppose that the economy is initially operating at the full employment level. Consider that there is a deficit in government budget (G > T). To reduce the deficit, the government plans to increase the taxes. What will be the effect of an increase in taxes in the short-run and in the long-run? Explain the dynamics of employment, output, and prices in the short-run and in the long-run by using the AS-AD model. Illustrate your answers by drawing the relevant graphsGive an example of a concept you think may be associated with strong macroeconomic performance. Explain why this is the case. Use real-world examples and explanations. concepts lists - economics and the economic way to thinking - economic theory - scarcity -opputunity cost - market and competitive markts -supply -how markets reach equilibrium price and quantity1.1 The Nigerian economy is heavily reliant on oil revenue. Using elasticity theory, analyse how the government can maximize Nigerian oil sector revenue. 1.2 Examine the possible impact of the elasticity strategy on the macroeconomic objective of Nigerian economic growth considering that its economy is in distress.