Suppose the economy is initially in short-run equilibrium at K. Which of the following stabilization policies could be used to close the gap?
Question 27 options:<\/p>\n
decrease government welfare spending<\/p>\n
decrease personal income taxes<\/p>\n
decrease government spending on defense<\/p>\n
increase payroll taxes
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Question 28 (1 point)<\/p>\n
At output level YK,
Question 28 options:<\/p>\n
the economy is not in equilibrium because it operates with an output gap.<\/p>\n
the economy is in short-run equilibrium and it operates with an inflationary gap.<\/p>\n
the economy is in short-run equilibrium and it operates with a recessionary gap.<\/p>\n
the economy is not in equilibrium because the unemployment rate is below the natural rate of unemployment.
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Question 33 (1 point)<\/p>\n
Suppose the economy is initially in short-run equilibrium at K. Policy makers could either pursue a stabilization policy or allow the economy to adjust on its own. What is the difference between the two policy choices, if any?
Question 33 options:<\/p>\n
Both policies would return real GDP to its potential at a price level of Pj.<\/p>\n
Both policies would return real GDP to its potential at a price level of Ph.<\/p>\n
A stabilization policy would return real GDP to its potential at a price level of Pj while a nonintervention policy would return real GDP to its potential at a price level of Ph.<\/p>\n
A stabilization policy would return real GDP to its potential at a price level of Ph while a nonintervention policy would return real GDP to its potential at a price level of Pj.
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Question 34 (1 point)<\/p>\n
Table 7-1 shows the aggregate demand and short-run aggregate supply curves for an economy. The potential level of output is $7.6 trillion.<\/p>\n
If policymakers adopt a nonintervention policy, the economy gap
Question 34 options:<\/p>\n
would return to potential output at a price level of 2.8.<\/p>\n
would return to potential output at a price level of 1.2.<\/p>\n
would return to potential output at a price level of 2.0.<\/p>\n
would return to long-run equilibrium at an output level of $6 trillion.
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Question 35 (1 point)<\/p>\n
Question 21 (1 point)<\/p>\n
At output level YK,
Question 21 options:<\/p>\n
potential output is less than actual output.<\/p>\n
there is a surplus of real GDP.<\/p>\n
the unemployment rate exceeds the natural rate of unemployment.<\/p>\n
over time aggregate demand will rise to restore long-run equilibrium.
Save<\/p>\n
Table 7-1 shows the aggregate demand and short-run aggregate supply curves for an economy. The potential level of output is $7.6 trillion.<\/p>\n
What is the initial real GDP and price level?
Question 35 options:<\/p>\n
Real GDP = 7.6 trillion; price level = 1.2<\/p>\n
Real GDP = 7.6 trillion; price level = 2.8<\/p>\n
Real GDP = 6.8 trillion; price level = 2.0<\/p>\n
Real GDP = 7.8 trillion; price level = 1.0
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Question 36 (1 point)<\/p>\n
A shift from SRAS1 to SRAS2 could have been caused by all of the following except
Question 36 options:<\/p>\n
an increase in the consumer confidence index.<\/p>\n
an increase in payroll tax.<\/p>\n
a rise in health care costs which raises the cost of employing labor.<\/p>\n
terrorist attacks that destroys an economy\u2019s infrastructure.
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Question 37 (1 point)<\/p>\n
Suppose the economy is initially in short-run equilibrium at B. Policy makers could either pursue a stabilization policy or allow the economy to adjust on its own. What is the difference between the two policy choices, if any?
Question 37 options:<\/p>\n
A stabilization policy would return real GDP to its potential at a price level of Pa while a nonintervention policy would return real GDP to its potential at a price level of Pd.<\/p>\n
A stabilization policy would return real GDP to its potential at a price level of Pd while a nonintervention policy would return real GDP to its potential at a price level of Pa.<\/p>\n
Both policies would return real GDP to its potential at a price level of Pa.<\/p>\n
Both policies would return real GDP to its potential at a price level of Pd.
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Question 41 (1 point)<\/p>\n
Table 6-4<\/p>\n
Table 6-4 shows some output and income data for Manna Land.<\/p>\n
What is the value of Manna Land\u2019s net foreign income?
Question 41 options:<\/p>\n
-$100 billion<\/p>\n
$1,100 billion<\/p>\n
$100 billion<\/p>\n
$200 billion
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Question 43 (1 point)<\/p>\n
Suppose clothing manufacturer, Eddie Bauer, produced 10,000 pairs of jeans in 2005 but sold 9,200 pairs. How will this be recorded in GDP accounts?
Question 43 options:<\/p>\n
The 9,200 pairs sold will be counted under the consumption component of GDP in 2005 and the 800 pairs that were not sold will not be included in GDP.<\/p>\n
The 10,000 pairs of jeans produced would be counted as investment and will be included in GDP.<\/p>\n
The 9,200 pairs sold will be counted as consumption and the 800 pairs that were not sold will counted as investment and both items will be included in 2005 GDP.<\/p>\n
The 9,200 pairs sold will be counted under the consumption component of GDP in 2005 and the 800 pairs that were not sold will be included in 2006 GDP.
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Question 44 (1 point)<\/p>\n
The equality between GDP and gross domestic income implies that income generated by final goods and services is equal to
Question 44 options:<\/p>\n
personal consumption expenditures.<\/p>\n
gross private domestic investment.<\/p>\n
expenditures on final good and services.<\/p>\n
total wages and other employee compensation.
Save<\/p>\n","protected":false},"excerpt":{"rendered":"
Suppose the economy is initially in short-run equilibrium at K. Which of the following stabilization policies could be used to close the gap? Question 27 options: decrease government welfare spending decrease personal income taxes decrease government spending on defense increase Read More …<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-179288","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/179288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/comments?post=179288"}],"version-history":[{"count":0,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/posts\/179288\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/media?parent=179288"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/categories?post=179288"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.benedictsol.com\/blogs\/wp-json\/wp\/v2\/tags?post=179288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}