The aggregate demand and supply for Cancum are shown in the table below. Potential GDP (LAS) is $550 billion. Price Index 105 110 115 120 125 130 135 140 Aggregate Quantity Demanded 650 550 450 350 250 150 se 0 Aggregate Quantity Supplied 50 150 250 350 450 550 600 650 a. If the economy is in equilibrium, it experiencing a(n) (Click to select) gap of $ b. Suppose government uses countercyclical fiscal policy to close the gap. In order to achieve full employment AD would have to (Click to select) by $ c. As a result of this change, the inflation rate would be %. Round your answer to 2 decimal places.

The aggregate demand and supply for Cancum are shown in the table below. Potential GDP (LAS) is $550 billion. Price Index 105 110 115 120 125 130 135 140 Aggregate Quantity Demanded 650 550 450 350 250 150 se 0 Aggregate Quantity Supplied 50 150 250 350 450 550 600 650 a. If the economy is in equilibrium, it experiencing a(n) (Click to select) gap of $ b. Suppose government uses countercyclical fiscal policy to close the gap. In order to achieve full employment AD would have to (Click to select) by $ c. As a result of this change, the inflation rate would be %. Round your answer to 2 decimal places.

ECON MACRO

5th Edition

ISBN:9781337000529

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Introduction To Macroeconomics

Section: Chapter Questions

Problem 3.3P

See similar textbooks

Similar questions

Assume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on: aggregate demand, aggregate supply, price level, real GDP.(a) A decrease in government expenditure in infrastructure(b) A severe recession occurs in a country which has been a major importer of thenation’s exports.(c) The federal government increases business taxes with diagram
Consider the following equations describing the components of demand and equilibriumin the goods market:C= 120 + 0.5 (Y - T)I = 40G=20T= 40 What is aggregate demand?
In 2006, the economy of Singsville had an aggregate demand and aggregate supply according to the following schedule:Price level Aggregate Demand Short-Run Aggregate Supply100 $1445 $1085110 $1380 $1140120 $1315 $1195130 $1250 $1250140 $1185 $1305150 $1120 $1360160 $1055 $1415 What was the equilibrium price level in Singsville in 2006?
Describe how different parts of the economy may have experienced shifts and changes in supply and demand. Provide at least 4 examples.
Question 6 refers to the graph below. Aggregate Supply1 Aggregate Supply2 Aggregate Supply3 Aggregate Demand4 Aggregate Demands Aggregate Demand1 Aggregate Demand3 Aggregate Demand2 REAL GROSS DOMESTIC PRODUCT 25. In the graph above, crowding in is shown by which of the following shifts? (A) Aggregate Demand to Aggregate Demand4 to Aggregate Demands (B) Aggregate Demand to Aggregate Demands to Aggregate Demand4 (C) Aggregate Demand to Aggregate Demand2 to Aggregate Demand3 (D) Aggregate Demand1 to Aggregate Demand3 to Aggregate Demand2 (E) Aggregate Supply to Aggregate Supply2 toAggregate Supply3 PRICE LEVEL
In 2013, Prussia's aggregate demand curve was determined by the equation M + 1-4% A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation Using this information, draw Prussia's old and new dynamic aggregate demand curves on the graph Which of the factors could have resulted in the change irn aggregate demand seen between 2013 and 2014? 13 AD 2013 an improvement in technology O an increase in imports O higher consumer confidence O a decrease in oil prices 12 AD 2014 10 8 5 4 3 2 4 -3 2 1 0 1 2 3 4 5 6 78 9 10 Real GDP growth rate
Real GDP Real GDPDemanded, Price Level Supplied,Billions (Price Index) Billions$100 300 $450200 250 400300 200 300400 150 200500 100 100 Use these sets of data to graph the aggregate demandand aggregate supply curves. What is the equilibriumprice level and the equilibrium level of real output inthis hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output?Explain.b. Why will a price level of 150 not be an equilibriumprice level in this economy? Why not 250?c. Suppose that buyers desire to purchase $200 billion ofextra real output at each price level. Sketch in the newaggregate demand curve as AD1. What factors mightcause this change in aggregate demand? What is thenew equilibrium price level and level of real output?
Specify the supply determinants of real GDP. List the factors of each category and explain in detail.
Durable goods and non-durable goods comprise approximately ________ of the supply side of the GDP. 1% 20% 30% 55%
Only typed answer An economy is described by the following equations: C = 60 + 0.75 (Y – T) I p = 100 G = 150 NX = 30 T = 180 Y* = 760 By how much would government purchases have to change in order to eliminate any output gap?
COMPUTE FOR MP AND AP. EXPLAIN.
13 Which of the following would increase aggregate demand? Increase in savings. Increase in taxation. Decrease in consumption spending. Increase in government spending.