If the U.S. economy is currently at point K, which of the following could cause it to move to point N? OA. The price level in the United States falls relative to the price level in other countries. OB. Congress abolishes investment tax incentives. OC. The interest rate rises. O D. Household wealth declines. Real aggregate expenditure, AE (trillions of dollars) Y=AE AE AE, Real GDP, Y (trillions of dollars)

If the U.S. economy is currently at point K, which of the following could cause it to move to point N? OA. The price level in the United States falls relative to the price level in other countries. OB. Congress abolishes investment tax incentives. OC. The interest rate rises. O D. Household wealth declines. Real aggregate expenditure, AE (trillions of dollars) Y=AE AE AE, Real GDP, Y (trillions of dollars)

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter11: Managing Aggregate Demand: Fiscal Policy

Section: Chapter Questions

Problem 2TY

See similar textbooks

Similar questions

estion The table gives aggregate demand and supply schedules for a hypothetical economy. Amount of Real Output Demanded Price Level (Index Amount oI Real Output Suppiied Value) $ 200 300 $ 500 300 250 450 400 200 400 500 150 300 600 100 200 If the amount of real output demanded at each price level falls by $200, this might have been caused by O A. a decrease in the personal income tax. O B. an increase in net exports. OC.a worsening of business expectations. O D. an increase in consumer wealth.
1Why low rate inflation is considered necessary for economic grwoth? Oa It does not affect the purchasing power of wages Ob. It indicates that the currency is in continuous demand by the people Oc taffects only the rich and not the poor Od itact as an incentive to boost in supply in the economy 2When the economy is in Keynesian macroeconomic equilibrium, planned investment is greater than actual investment. O a False O b. True 3Government fixes the floor and ceiling price which will not allow the producers to increase the price on their wish, this is a type of. O a Physical control called price pegging O b. Monetary policy control measures O. Physical control called price tagging Od. Fiscal policy control measures O e None 4Rising output coupled with falling prices is called stagflation O a. False O b. True 5The Value of marginal propensity to consume lies O a. O to 1 O b. Less than zero Oc -1 to 1 Od. Between O to 1 6The Central Bank way to control inflation is Oa Monetary policy…
'Finance minister announces that the federal income-tax rate will rise by three percentage points." Assuming that aggregate output is demand-determined, the AE function will and equilibrium national income will O a. Become flatter; fall. O b. Shift up parallel to itself; rise. Ос. Весome steeper, rise. O d. Shift down parallel to itself; fall. O e. Not change; not change.
Suppose an economy can be represented by the folowing table, in which employment is in millons of workers and GDP and AE are expressed in billions of dollars: Employment 100 Real GDP Aggregate Expenditures 1275 1350 1425 1500 1575 1650 1200 105 1300 1400 1500 1600 1700 110 115 120 125 fut employment is 120 milion workers? What is its what kind of expenditure oap exists size? Suppose government spending, taxes, and net exports ane all independent of the level of rcal GDP. What is the multplier an ths economy? below the econemy's potential, what is the size of the recessionary expenditure qapt
Economics How are aggregate output and the real interest rate determined in compettive egulbum? OA The aggregate oulput can be found by multiplying current employment by current real wage at the intesection of the current labour supply and demand curves, given the raal inderest rate. and ssubtracting the level of investment in the economy OB. Cument aggregata output and the real interest rate are determined by the intersection of the output supoly and demand ouves OC. Cunent aggregate output can be found by finding current employment from the intersection of the current labour supply and domand ourves given the real interest rate and aocounting tor total tactor productivity OD. The real interest rate is determined by the slope of the output supply curve at a given level of aggregate output
omics 1B Jan22 Y1 S2 The sale of South African Airways will affect which component of aggregate demand? O A. Consumption O B. Investment O C. Net Exports O D. Government Spending Previous page a Hi e Other AS W 人 XI
Congratulationst You have been appointed an economic policy adviser to the United States, You are told that the economy is significantly abowe futtemplyoment GDP. Based on this inlormation, how can the economy would adjust to reach LR.SR Equilbrium (Classical View)? The economy wilt experience low unemployment rate, pushing wages up, and increasing the pelces of a key input (labor). shatting the sAS to the left (up). The economy will experience high unemployment rate, pushing wages down, and reducing the prices of a key input (labor). shiting the SAS to the right (down). The econoriny wil experience low unemployment rate, decreasing inceme, which will eventually shift the AD to the left. The eooncmy will experience low unemployment rate, pushing wages up, and increasing the prices of a key input (labor), shiting the sAs to the night (down).
2. The model of aggregate demand and supply represents O A. the relationship between the real Gross Domestic Product and the overall price level O B. the changes in Gross Domestic Product over time O C. the relationship between the inflation and unemployment rates O D. the changes in the price level over time
The formula for aggregate expenditure is Select one: O O O a. AE = C+/+ G + NX. b. AE = C+/+G+ NX-depreciation. C. AE=C+I+ G- NX. Macroeconomic indicators can be categorized as "leading" or "lagging". Whic
All of the following are components of aggregate expenditure except Select one: O real GDP a. actual government purchases O b. net export O c. planned investment 45 The largest source of government revenues is.
Which of the following is NOT a component of planned aggregate expenditure? Select one: O a. Planned investment O b. Government purchases O c. Transfer payments d. Net exports O e. Consumption
The crowding-out effect is the tendency for a government budget deficit to raise the and investment. O A. price level; increase O B. real interest rate; decrease O C. quantity of output; increase O D. real wage rate; decrease Click to select your answer. 888 :二。 F7 F6