(Figure: AD-AS) Use Figure: AD-AS. Consider an economy that is producing an aggregate output of Y₁. The economy faces a(n). gap, which can be closed by fiscal policy. Aggregate price level SRAS ₁ AD2 Real GDP recessionary; contractionary inflationary; contractionary recessionary; expansionary inflationary; expansionary LRAS AD3 Y₂ Yp Y₁ AD₁

(Figure: AD-AS) Use Figure: AD-AS. Consider an economy that is producing an aggregate output of Y₁. The economy faces a(n). gap, which can be closed by fiscal policy. Aggregate price level SRAS ₁ AD2 Real GDP recessionary; contractionary inflationary; contractionary recessionary; expansionary inflationary; expansionary LRAS AD3 Y₂ Yp Y₁ AD₁

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter23: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 1QR

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Suppose the Federal Reserve begins to Increase the supply of money at an Increasing rate. What Impact would that have on GDP, unemployment, and inflation?
Will the shift of SRAS to the right tend to make the equilibrium quantity and price level higher or lower? What about a shift of SRAS to the left?
Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?
Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our exports, goes into a recession. Use the AD/AS model to determine the likely impact on our equilibrium GDP and price level.
Suppose the U.S. Congress passes significant immigration reform that makes it more difficult for foreigners to come to the United States to work. Use the AD/AS model to explain how this would affect the equilibrium level of GDP and the puce level.
1. Key facts about economic fluctuations The graph included below approximates United States business cycles between quarter one of 1947 and quarter three of 1951. The shaded region denotes periods of six or more consecutive months of declining real gross domestic product (real GDP). W 1048 1040 1000 YEAR REAL GDP (Billions of dollars) 2170 2070 1970 1870 1770 1047 1001 Source: "Current-dollar and Real GOR" Bureau of Economics Analysis. last modified May 1, 13. accessed May 15. 13. http://www.bea.gov/national/xl/gdplev.. Notice that real GDP trends upward over time but experiences ups and downs in the short run. These short-run fluctuations in real GDP are often referred to as
Cosider the following data on U.S GDP:a.What was the growth rate of nominal GDP between 1994 to 2014?b.What was the growth rate of the GDPdeflator between 1994 to 2014?c.What was the real GDP in 1994 measured in 2009 prices?d.What was the real GDP in 2014measured in 2009 prices?e.What was the growth rate of the GDP between 1994 to 2014?f.Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP?Explain.
The economy starts out on the curves AD, and SAS Suppose that people expect deflation (a falling price level), but aggregate demand remains at AD Draw a curve that shows what happens in the economy. Label it. Draw a point at the new equilibrium. Show Transcribed Text 240 200- 160- 120- 80 120 Price level (GDP deflator, 2007 = 100) LAS 40- 04 5 G 6 o SASO ADO 10 9 10 11 12 13 14 Real GDP (trillions of 2007 dollars) 15 Q Q
b) Why is GDP critically linked with inflation and unemployment rate?
The seasonally adjusted data below depict the performance of the economy of the United States in five quarters of 1953-1954. Year/Quarter 1953/Q4 1954/Q1 1954/02 1954/Q3 1954/04 Select one: OA. 1953/04. Annual Percent Change Nominal GDP OB. 1954/01 O C. 1954/02. O D. 1954/03. QE. 1954/04. -5.2 -0.6 0.8 5.1 9.2 Real GDP in the United States was lowest in which of the following quarters? Annual Percent Change Real GDP -5.9 -1.9 0.4 4.6 8.1
Year GDP Disposable Income Consumption Imports 2036 $1050 $840 $830 $111 What is the marginal propensity to import? 2037 $1000 $800 $800 $100 Round to two decimal places. If your answer is 0.064 (i.e., 6.4%) enter .06. If your answer is 0.065 (i.e., 6.5%) enter .07. Do not forget to enter the negative sign, if appropriate.
1. What are the components of aggregate supply? Provide 2 substantive postings to each of the 3 Discussion Question's each week. 2. How do aggregate supply shifts occur? Provide 2 substantive postings to each of the 3 Discussion Question's each week. 3. How do recessionary and inflationary GDP gaps arise? Provide 2 substantive postings to each of the 3 Discussion Question's each week.