in the AD/AS model with an upward sloping SRAS curve, if autonomous net exports decreases by 575 billion and the marginal propensity to consume (MPC) is 0.75, then there is a(n) [Select] in [Select] by [Select] billion.
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- Discuss what is meant by a recessionary gap and an inflationary gap in the AD/AS model. Give examples of what will change consumption, investment, government purchases, and net exports, and thus AD. (12.1)The AD/AS graph illustrates an inflationary gap when the equilibrium level of real GDP is substantially to the left of potential GDP or the LRAS curve. substantially to the right of potential GDP or the LRAS curve. equal to full employment verticalUpon the 'multiplier effect' in the Keynes effective demand model, if the investment (I) is increased by 10 trillion yen, how much would the GDP (output) be increased additionally? Assume that the propensity to consume is 0.6 and the other exogenous factors remain unchanged.
- The aggregate expenditures model assumes that the level of net exports is independent from the real GDP true or falseThe marginal propensity to save of a certain country is given by S'(x) = 0.5 + 0.4x. Determine the marginal propensity to consume. Answer C' (x) = ||Which of the following is a major difference between the AD-AS model and the dynamic AD-AS model? The dynamic AD-AS model assumes OA. AD only includes consumption, investment, and government purchases, while the AD-AS model assumes AD includes consumption, investment, government purchases and net exports. B. the SRAS is stable and will not shift, while the AD-AS model assumes the SRAS can only change with an exogenous event such as oil price changes. OC. the economy does not experience long-run growth, while the AD-AS model assumes there is constant inflation in the economy. OD. potential GDP increases continually, while the AD-AS model assumes the LRAS does not change.
- The Aggregate Expenditure Model is traditionally called the” Keynesian Cross”. Use the Aggregate Expenditure Keynesian Cross diagram to show what happens to the economy under the following conditions: (Note that is different from the AS-AD Model.) What happens in the model if government expenditures are increased (G↑)? What happens if taxes are raised (T↑)? What happens to the US economy if the rest of the world experiences economic growth and imports more US goods (X↑)?Graphically show the likely short-run impact on US real GDP and aggregate price level using the AD/AS model. Explain your prediction. Which curve in the AD/AS model would a change in US consumer consumption affect? Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.If aggregate demand is increased by 4500 and MPC is 0.75, what is the increase in Y?
- According to the AS-AD model, which of the following is true about output when there is an increase in the AD and no other change? (Select all that are true) There is a decrease in output in the short run There is an increase in output in the long run There is an increase in output in the short run There is no change in output in the long run There is no change in output in the short run There is a decrease in output in the long runSuppose Mexico, one of our largest trading partners and purchaser of a large quantity of our exports, goes into a recession. Use the AD/AS model to determine the likely impact on our equilibrium GDP and price leveDescribe reasons why the SRAS and/or LRAS may shift left or shift right. Holding AD constant, how would these actions tend to change the equilibrium price level and real GDP produced? (11.3)