Start Discovering Solved Questions and Your Course Assignments
TextBooks Included
Active Tutors
Asked Questions
Answered Questions
How do automatic stabilizers affect budget deficits and surpluses? How would automatic stabilizers be affected by an annually balanced budget rule?
Why would an increase in planned investment increase real GDP, but unplanned increase in inventory investment decrease real GDP, in aggregate expenditure model?
Why are unplanned inventory changes the key to predicting future changes in real GDP in the aggregate expenditure model?
Why can't an economy with an MPC greater than one reach a stable equilibrium in the aggregate expenditure model?
Consumption equals $32,000 when disposable income equals $40,000. What is the marginal propensity to consume? The marginal propensity to save?
What would happen to autonomous consumption if real wealth increased and expectations of the future became more optimistic?
What would happen to autonomous consumption if household debt fell and the interest rate rose over the same time period?
Why does the effect of a given increase in aggregate demand have a larger effect on real output in the short run, the more excess capacity exists in economy?
How does the slope of the Keynesian short-run aggregate supply curve depend on the degree of excess capacity in the economy?
Why do classical economists and Keynesian economists agree on the long-run effects of a fall in aggregate demand, but not agree on the short-run effects?
Distinguish cost-push from demand-pull inflation. Provide an example of an event or shock to the economy that would cause each.
You operate a business in which you manufacture furniture. What does prices imply about the slope of the short-run aggregate supply curve?
If retailers such as Wal-Mart and Target find that inventories are rapidly being depleted. What are the likely consequences for output and investment?
What impact do you think the tend is likely to have on the unemployment rate in a European country? Why?
How can unions result in higher unemployment rates? How would the results differ for someone who wants to be employed in the union sector as compared.
What would happen to the real interest rate if nominal interest rate went from 9 percent to 15 percent when inflation rate went from 3 percent to 10 percent?
What if you already expected the inflation rate to slow at the time you took out the loan? Explain.
How does an adjustable rate mortgage agreement protect lenders against inflation? Who bears the inflation risk?
Predict the effect of such legislation on unemployment. What would you expect to happen to the unemployment rate in neighboring areas?
Why does GDP measure only the final value of goods and services? Why does GDP measure only the value of goods and services produced within a country?
List, from the largest magnitude to the smallest, following categories: disposable personal income, gross national product, national income and personal income.
Why could next year's real GDP exceed next year's nominal GDP? Could real GDP grow at the same time that real GDP per capita falls?
Answer these questions about GDP: How could real GDP grow, while, over the same period, real GDP per capita falls?
While real GDP was growing at 2.3 percent in Country B, how long would it take before the two countries had the same level of real GDP per capita?
Predict how the standard of living will vary between these two countries over time as a result of divergent growth rates.