The equilibrium level of income determined by the equality of Aggregate Demand and Aggregate Supply indicate the full employment level. a. False b. True
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17. The equilibrium level of income determined by the equality of Aggregate Demand and
a.
False
b.
True
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Solved in 2 steps
- 1. If equilibrium national income is higher than the potential income at full- employment, there will be in the economy a.deflationary gap b.recessionary gap c.inflationary gap d. inequality gapAccording to Say's law which of the following statement is correct O a. The equilibrium of national income occurs where aggregate demand is equal to aggregate supply. b. Demand creates supply O c. None O d. Supply creates it's on demand O e. Full employment createsAggregate Supply and Aggregate Demand Real GDP Supplied Price $ 250 $ 500 $ 750 $1000 1500 3000 4500 4500 Real GDP Demanded 5500 5000 4500 4000 a. Plot the aggregate supply and aggregate demand curves on the same graph. b. State the equilibrium real GDP and price level. c. At the equilibrium GDP from part b, is the economy experiencing a recessionar gap? Explain why it is or is not experiencing a recessionary gap. d. State what happens to the nominal wages and the real wage in the short run phase of the aggregate supply.
- 5 k es Price Level 170 150 130 110 90 The Economy of Morin 70 460 480 500 520 54535,75 580 600 Real GDP AD AS a. If potential GDP (LAS) is $550, and the economy is presently in equilibrium, then there is a(n) [recessionary b. In order to close this gap aggregate demand must increase by $ billion. gap of $ billion. c. If every $1 change in government spending leads to a $4 change in aggregate demand, government spending must increase by $ billion.1. A recessionary gap is the result of the: a.actual level of output falling below the full-employment level of output. b.full-employment level of output falling below the actual level of output. c.full-employment level of output falling below the actual level of consumption.The equilibrium of national income occurs where aggregate demand is equal to aggregate supply, also called O a. Effective demand O b. National income O c. Full employment O d. Underemployment
- 1.If the employment rate of output exceeds the planned aggreagte expenditure what will happen to the unemployment rate assuming that it will persist in the future?Answer exercises 11-14 on the basis of the following information. Assume that equilibrium real GDP is $800 billion, potential real GDP is $950 billion, the MPC is .80, and the MPI is .40.R The model of aggregate demand/aggregate supply... O Identifies the equilibrium GDP and price level as well as the gap between the equilibrium GDP and the potential GDP Identifies the potential GDP and price level as well as the gap between the price level and the inflation. O Identifies the equilibrium GDP the economy will reach in the long A run O Identifies the equilibrium quantity and price for consumer goods 10 % 5 T 6 O Y Com liji fa 887 & 7 7 U 8 4 f10 num lk. 8 ( 5 9 開
- 4. What impact does full employment have on the economy?.f. Technological improvements increase productivity. gram to illustrate and explain how each of the following will affect the equilibrium price level and real GDP: a. Consumers expect a recession. b. Foreign income rises. c. Foreign price levels fall. d. Government spending increases. e. Workers expect higher future inflation and negotiate Use an aggregate demand and aggregate supply dia- higher wages now. In thThe economy is at a point where policy makers in the country are concerned about unemployment. One action the policy makers could take to move the economy to its potential level of GDP would be An increase in the corporate tax rate O An increase in government spending An increase in interest rates O An increase in the income tax rate Provinus
