Final
If actual GDP is $500 billion and there is a negative GDP gap of $10 billion, potential GDP is:
$510 billion (If it was positive: 490)
In a mixed open economy, if aggregate expenditures exceed GDP,
Ig + X + G > Sa + M + T.
The phase of the business cycle in which output and employment is at a minimum is called
The trough
Examples of macroeconomic statements
Viewpoint of the entire economy/ The gross profits of all businesses were 182 billion last year.
Refer to the diagram for a private closed economy. Aggregate saving in this economy will be zero
When GDP is 60 billion
An appropriate fiscal policy for severe demand pull inflation is
a tax rate increase
The immediate short-run aggregate supply curve represents circumstances where
both input and output prices are fixed
The study of economics is primarily concerned with:
choices that are made in seeking the best use of resources
If the MPC is 0.8 and disposable income is $200, then
consumption and saving cannot be determined from the information given. Or...saving will be $40 ?
The size of the multiplier associated with an initial increase in spending will be
diminished if inflation occurs.
Discretionary fiscal policy refers to
intentional changes in taxes and government expenditures made by Congress to stabilize the economy.
Refer to the diagrams. The location of curve B depends on the
interest rate together with the location of curve A.
Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. A recession is depicted by
panels (A) and (B).
Real GDP per capita is
real GDP divided by the total population
Refer to the diagram. Arrows (1) and (2) represent
resources and goods. Arrows 3 and 4: income and output
Graphically, demand-pull inflation is shown as a:
rightward shift of the AD curve along an upsloping AS curve.
Refer to the graph. Growth of production capacity is shown by the
shift from AB to CD.
Modern economic growth has lasted for
The last 250 years
GDP is defined as
the market value of all final goods and services produced within a country in a given period of time
Refer to the given data. The marginal propensity to consume is
0.80
The table contains information about a hypothetical economy. All figures are in millions. The labor force is
102 million (Employed + unemployed)
Refer to the accompanying data (all figures in billions). GDP is
121 billion
Suppose that GDP was 200 billion in Year 1 and that all other components of expenditures remained the same in Year 2 except that business inventories FELL by 10 billion. GDP in year 2 is
190 billion (If they had increased: 210)
The table gives information about the relationship between input quantities and real domestic output in a hypothetical economy. The level of productivity in the economy is
2
Refer to the table. Between years 1 and 2, real GDP per capita grew by approximately __________ percent in Alta.
2 Between years 2 and 3: 3.5%
In the diagram, the economy's short-run AS curve is line _____ and its long run AS curve is line ____.
2, 1
The table contains data for a hypothetical single-product economy. Nominal GDP in Year 1 is
256 Year 2: 468 Year 3: 756 Year 4: 1,196
One year the CPI was 296 and the next year the CPI was 273. The inflation rate was
8.4 %
For the United States, with a current nominal GDP of about 28 trillion, the difference between an 8 percent and 12 percent rate of growth in the number of years it would take to double the economy is
About 3 years
The short-run aggregate supply curve is steeper at outputs above the full-employment output. This is because the economy's
Available resources are already employed and adding more workers to a fixed number of capital resources reducing the efficiency of workers leading to rising per-unit production costs.
Refer to the diagram. If net exports are Xn2, the GDP in the open economy will exceed GDP in the closed economy by
BD
Refer to the diagram. Other things equal, this economy will shift its production possibilities curve outward the most if it
Chooses point A
Refer to the diagram, in which Qf is the full-employment output. The shift in the aggregate demand curve from AD3 to AD2 could result from which of the following fiscal policy actions?
Contractionary fiscal policy
Real GDP refers to
GDP data that have been adjusted for changes in the price level.
In the Covid recession in 2020, to try to eliminate the recessionary expenditure gap as quickly as possible, policy makers undertook various macroeconomic stimulus policies such as
Lowering the interest rate to encourage investment.
Refer to the diagrams, in which AD1 and AS1 are the "before" curves and AD2 and AS2 are the "after" curves. Other things equal, a decline in net exports caused by the foreign purchases effect of a price-level increase is depicted by the
Shift of the AD curve in A Or....move from point a to point b in panel (B).
A recessionary expenditure gap is
The amount by which the aggregate expenditure at the full employment GDP fall short of those required to achieve the full employment GDP.