This is the html version of the file http://kukmojungecn101.weebly.com/uploads/1/4/5/6/14568902/ps3ak_2012_ss2.pdf. Google automatically generates html versions of documents as we crawl the web. Page 1 1 Problem Set #3 Intermediate Macroeconomics 101Due 27/8/12 Question 1. (Ch6. Q1)Using the information in this chapter, label each of the following statements true, false, oruncertain. Explain briefly.A. Since 1950, the participation rate in the United States has remained roughly constantat 60%
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Fundamentals of Macroeconomics Paper Kimberly Gay, Janine Lewis, Rosalyn O’Brien, Vicente Rodriguez, Marie Watts ECO/372 January 30, 2015 Kathy Crump Introduction There are many factors that contribute to the current state of the United States economy. An analysis of the current performance of certain factors can help to determine the financial decisions and the fiscal policies the government will need to recommend for the future. We will discuss in detail four important factors;
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Questions: 2. What assumptions cause the intermediate-short-run aggregate supply curve to be horizontal? The assumptions are that prices are flexible and wages are fixed. Why is the long-run aggregate supply curve vertical? The AS curve is vertical at the full-employment level of real GDP. Also, because wages and other input prices rise and fall in order to be in line with price changes. Explain the shape of the short-run aggregate supply curve. The unsloping aggregate supply curve AS indicates
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1) Balanced budget amendments are believed to be destabilizing. Explain why this is so. Answer: The balanced budget amendment to the U.S. Constitution is a rule requiring states to reframe from spending above their income. Which requires a balance of spending on projects and the expenditures of the government. There are provisions that allow exceptions for war times, national emergencies or recessions allowing the suspension of the rule by a supermajority vote. This method has been highly criticized
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2. In the year 2009, the world was experiencing an economic recession. However, the economic downturn in Australia was not as bad compared to countries such as the United States and the United Kingdom. This is due to the fact that the Australian government successfully managed to control the economy. During the recession, there is a recessionary gap which is the amount that aggregate expenditures fall short of the full-employment GDP. This fall in consumption will cause a decline in sales profit
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Question 1 1. In the dynamic model, the demand for goods and services will ______ as the natural level of output increases and ______ as the real interest rate increases. Answer | A. | increase; increase | | B. | decrease; decrease | | C. | decrease; increase | | D. | increase; decrease | 1 points Question 2 1. In the dynamic model, changes in fiscal policy are captured in changes in the: Answer | A. | natural rate of interest. | | B. | random demand shock.
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In this diagram we can see that an increase in China’s demand for our exports causes a rise in aggregate demand, shown by the lines AD0 to AD1. The short run effect of this is shown by the new equilibrium found where the new aggregate demand meets the short term aggregate supply. This new equilibrium causes a rise in the price level as well as a rise in the GDP. The points Yf and Yf1 show that our economy goes past full employment which will create a shortage in labour, meaning wages will rise and
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A. Suppose that real GDP is currently $97 billion per year and natural real GDP is currently $100 billion. Measured as a percentage, what is the GDP gap? Natural Real GDP – Real GDP/ Natural Real GDP $100 - $97/100 = 3 The GDP gap is 3% B. Suppose natural real GDP is growing by $4 billion per year. By how much must real GDP have risen after two years to close the GDP? By the second year the natural real GDP will be $108. In order for the gap to close the real GDP would have to rise by the
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ECON1102 Chart Book - 2013 Session 2 Question 1: There are two factors that impact the AD model: the output （y）and the rate of inflation, the name of the curve reflects the fact that short-term equilibrium output is determined by, and equals, total planned spending in the economy. Increase in inflation will reduce planned spending and short-run equilibrium output, so the aggregate demand curve is downward sloping. Question 2: Yes, the fiscal stimulus to have work. Fiscal policy is the
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Teresa VanLoke Eco -111 October 17, 2013 Aggregate supply is a type of economics that tries to improve the productive capacity of the economy. A.S (aggregate supply) usually associated with monetarist or free market economics. These type of economics try to pinpoint the benefits of making markets, such as labor markets more flexible then they already are. Some supply side policies involve more government intervention to overcome failures. Benefits of the supply side include: lower inflation, lower
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