Q: Suppose the economy is operating at potential GDP when it experiences an increase in export demand.…
A: Increasing desire for products and services is created by an overactive market, that drives up the…
Q: According to Keynes, can the private sector always remove the economy from a recessionary gap? What…
A: The Keynesian economic school of thought was developed in the period of the great depression of the…
Q: If the economy above was at point D, a good thing to do would be to increase government spending.…
A: Increasing government spending or reducing government spending to energize a sluggish economy,…
Q: Your Facebook feed shows a news article which says the Consumer Confidence Index has decreased.…
A: My Facebook feed shows a news article which says the Consumer Confidence Index has decreased. It's…
Q: Y = C + I even when the economy is not in equilibrium. t or f
A: An economy is said to be a closed economy if it does not trade with other countries. In such an…
Q: an economy is currently operating at point A. What key policy recommendations would you make for an…
A: Contractionary monetary policy is the policy by which the monetary authority contract the money…
Q: An economy with no government and no foreign trade tends to move toward equilibrium GDP because at…
A: GDP is the gross domestic product, the total of all the products, items, services, produced or…
Q: A recession in the United States is likely to raise the growth of real GDP in Europe. Do you agree…
A: Since Europe is the largest trading partner with the U.S., a recession in US will have a major…
Q: s shown in Exhibit 2, this economy is in macro equilibrium at: Group of answer choices $2…
A: The model that includes Consumption and Investment is referred as the Aggregate Expenditures Model.…
Q: A reduction in U.S net exports would shift U.S. aggregate demand A. rightward. In an attempt to…
A: The correct answer is option c
Q: Stagflation is a macroeconomic situation where Question 43 options: GDP falls and unemployment…
A: Macroeconomics is the branch of economics that deals with concerning the economy as a whole.
Q: Q9. For each of the following sets of data, determine if output will need to increase, decrease, or…
A: AD = C+I+G where C= C+cYd
Q: Analyse the action that government can take to assist the economy during a recession
A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…
Q: How an economist thinks that the economy works—is it self-regulating or not?—influences his opinion…
A: SELF REGULATING ECONOMY. Classical economists believe in self-regulating economy. Wage rate and…
Q: A change in the price level will cause a shift in the expenditure schedule. True or False
A: Answer to the question is as follows :
Q: True or False If spending exceeds output, real GDP will decline as firms cut back on production.
A: If Actual Spending is greater than the Output, then more is being demanded than is being supplied.…
Q: Consider an economy that is operating below the full-employment level of real GDP. What would be the…
A: Meaning of Gross Domestic Product (GDP): The term gross domestic product refers to the situation…
Q: Outline the appropriate fiscal and monetary policy measures required to restore this economy to full…
A: GDP = C + I + G + X - M GDP in 2019 = 47.9 + 18 + 0 + 20.2 - 28.5 = 57.6 GDP in 2020 = 35.8 + 16.2 +…
Q: Which would most likely increase aggregate supply? An increase in the prices of imported products…
A: The aggregate supply curve is the total supply of goods and services in an economy that is willing…
Q: Y=C t /even when the economy is not in equilibrium
A:
Q: Keynes advocated government deficit spending during recessions, especially if full employment was…
A: True. The above statement is correct.
Q: eductions in government spending cut infrastructure investment which hurts private sector…
A: Supply-sider is a concept state that EG (economic growth ) could be most productive created by(…
Q: From 1990 to 1995, the U.S. economy was in a recessionary gap. According to the classical…
A: When a country's real gross domestic product (GDP) is less than its value at financial condition,…
Q: Keynes advocated the use of fiscal and monetary policy to stabilize an economy? When are the effects…
A: Classical economists believed in laissez-faire policy which means that there should be no government…
Q: A decrease in government spending will decrease the equilibrium price level and decrease aggregate…
A: Statement is True.
Q: To combat a recession, the Keynesian fiscal policy recommends the Government: Select one: a.…
A: The Keynesian proposition would result in the aggregate demand theory which would lead to the…
Q: Keynes viewed consumption as an activity based on psychology. Discuss how the work of David Laibson…
A: Psychology-Law of Keynes: According to his view when income increases then the consumption level…
Q: a recessionary gap exists when aggregate demand is above the full employment level of output true…
A: A recessionary gap occurs when a country's real GDP is lower than its GDP at full employment.
Q: Suppose most business executives expect a slowdown in the economy. How might this situation affect…
A: The loss of business and consumer confidence leads to an economic recession.
Q: the consumption schedule shows
A: The consumption schedule shows the relationship between consumption and level of disposable income.…
Q: An economy is at full employment. Which of the following can create an inflationary gap. Group of…
A: An inflationary gap exists when the demand for goods and services exceeds production due to factors…
Q: True or False: The economy is currently in long-run equilibrium. True False The economy is best…
A: Keynesian AD-AS model provides a framework for the determination of equilibrium level of output and…
Q: Insert the missing word or phrase: When planned aggregate spending does NOT equal current GDP,…
A: Aggregate Spending is the aggregate expenditure which is sum of consumption and investment.
Q: improvements in productivity shift the aggregate supply curve outward. true false
A: The aggregate supply curve shows the total quantity of output real GDP that firms will produce and…
Q: Tax cuts are more effective in generating the economy when the economy is in recession compared to…
A: The reduction in taxes that is being made by the government is known as a cut in taxes. This leads…
Q: automatic stabilizer is a feature of the economy that
A: Automatic stabilizer are the policies and program which automatically start function according to…
Q: According to Keynes, a. government spending should decrease during recessions. b. aggregate…
A: According to Keynesian macroeconomics, price and wages are inflexible.
Q: According to the classical economists, the supply curve is vertical at the level of potential GDP.…
A: In the aggregate demand (AD) and the aggregate supply (AS) model, the supply curve is vertical at…
Q: Member of Parliament, Mr. Parks, is alarmed at the state of the economy. Unemployment is excessively…
A: Answer: Fiscal policy: fiscal policy is the policy of the government to change government…
Q: Defend or Refute. “John Maynard Keynes rejected the theory of classical economics that there will be…
A: In the classical economics, Adam Smith proposed the idea of invisible hand meaning that any…
Q: If the economy produces at the point of long-run macro-economic equilibrium then real GDP Question…
A: GDP is used for measuring the value of economic activity in the country.
Q: If consumer confidence falls the impact upon the economy is _______________. A downturn. An…
A: The gross domestic product(GDP) of an economy is defined as the market value of all the final…
Q: generally rise during recessions.
A: Answer Unemployment tends to rise quickly and sometimes stays elevated throughout a recession. With…
Y = C + S even when the economy is not in equilibrium.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- if the economys real gdp is 400 billion less than full empyment. how much is needed to close the gap if the spending mumtiplyer is 3.33 ?Do you think there is a risk of stangflation in the world in the current economic situation?when equilibrium GDP falls belowpotential, an inflationary gap exists true false