Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN: 9781285165875
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 33, Problem 1QCMC
To determine
The impact of recession on real GDP and unemployment .
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Students have asked these similar questions
An economic recession means that _______.
a.
GDP is critically high
b.
Output and employment is down
c.
Employment is increasing
d.
Output is increasing
What is the relationship between the price level and the following components of aggregate demand?
a. There is (a negative/ no / a positive) relationship between the price level and consumption.
b. There is (a negative/no/ a positive) relationship between the price level and investment.
c. There is (a negative/no/ a positive) relationship between the price level and government spending.
d. There is (a negative/no/ a positive) relationship between the price level and net exports.
12. After several years of decline, the market for handmade
acoustic guitars is making a comeback. These guitars
are usually made in small workshops employing rela-
tively few highly skilled luthiers. Assess the impact on
the equilibrium price and quantity of handmade acous-
tic guitars as a result of each of the following events.
In your answers indicate which curve(s) shift(s) and in
which direction.
Chapter 33 Solutions
Principles of Economics, 7th Edition (MindTap Course List)
Ch. 33.1 - Prob. 1QQCh. 33.2 - Prob. 2QQCh. 33.3 - Prob. 3QQCh. 33.4 - Prob. 4QQCh. 33.5 - Prob. 5QQCh. 33 - Prob. 1QRCh. 33 - Prob. 2QRCh. 33 - Prob. 3QRCh. 33 - Prob. 4QRCh. 33 - Prob. 5QR
Ch. 33 - Prob. 6QRCh. 33 - Prob. 7QRCh. 33 - Prob. 1QCMCCh. 33 - Prob. 2QCMCCh. 33 - Prob. 3QCMCCh. 33 - Prob. 4QCMCCh. 33 - Prob. 5QCMCCh. 33 - Prob. 6QCMCCh. 33 - Prob. 1PACh. 33 - Prob. 2PACh. 33 - Prob. 3PACh. 33 - Prob. 4PACh. 33 - Prob. 5PACh. 33 - Prob. 6PACh. 33 - Prob. 7PACh. 33 - Prob. 8PACh. 33 - Prob. 9PACh. 33 - Prob. 10PA
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Similar questions
- 5 An economic recession means that _______. a. GDP is critically high b. Employment is increasing c. Output and employment is down d. Output is increasingarrow_forward1. Aggregate demand curves slope downwards for each of the following reasons EXCEPT A. The wealth effect: As the price level falls, the buying power of people's savings increases and induces them to spend more. B. The substitution effect: As the price level falls, people buy more of the cheaper goods and less of other goods. C. The interest rate effect: As prices for outputs rise, it costs more to make the same purchases, driving up the demand for money, raising interest rates and reducing investment spending. D. The foreign price effect: As the price level falls, U.S. become more attractive to foreigners and domestic residents, increasing net export spending.arrow_forwardSuppose the economy is experiencing a recessionary gap. In the long run, if there is no government intervention, the nominal wages will ______, unemployment will _____, and the price level will _______. A.fall; rise; fall B.fall; fall; fall C.rise; fall; rise D.rise; rise; risearrow_forward
- If the price level rises, what happens to aggregate supply? Aggregate supply _______. A. doesn't change, but the quantity of real GDP supplied increases B. decreases C. increases D. doesn't change, but the quantity of real GDP supplied decreasesarrow_forwardBased on the graph, a decrease in ________ could cause the economy to move from Point A to Point B. a. the price level b. consumer confidence c. the labor force participation rate d. wages e. taxes on consumersarrow_forwardAggregate Demand will increase if: A. Imports fall. B. Investment falls. C. Consumption falls. D. Exports fall.arrow_forward
- Unemployment would decrease and prices would increase if a. aggregate supply shifted left. b. aggregate demand shifted right. c. aggregate supply shifted right. d. aggregate demand shifted left.arrow_forward12. If _____ is rising, it likely means that the economy is shrinking. A. consumer spending B. nominal GDP C. the Consumer Price Index D. the unemployment ratearrow_forwardWhen the economy goes into a recession, realGDP _________ and unemployment _________.a. rises; risesb. rises; fallsc. falls; risesd. falls; fallsarrow_forward
- The French economist Jean-Baptiste Say trans- formed the equality of total output and total spending into a law that can be expressed asa. unemployment is not possible in the short run.b. demand and supply are never equal.c. supply creates its own demand.d. demand creates its own supply.arrow_forward1. Aggregate demand curves slope downwards for each of the following reasons EXCEPTA. The wealth effect: As the price level falls, the buying power of people’s savings increases andinduces them to spend more.B. The substitution effect: As the price level falls, people buy more of the cheaper goods and lessof other goods.C. The interest rate effect: As prices for outputs rise, it costs more to make the same purchases,driving up the demand for money, raising interest rates and reducing investment spending.D. The foreign price effect: As the price level falls, U.S. become more attractive to foreignersand domestic residents, increasing net export spending.arrow_forwardIn a situation of recession, what are the types of goods that will see their demand increase? Give examplesarrow_forward
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