« previous next »

Author Question: Comparing the aggregate supply curve and the short-run Phillips curve, we see that they A) both ... (Read 34 times)

javeds

  • Hero Member
  • *****
  • Posts: 570
on: Jun 29, 2018
Comparing the aggregate supply curve and the short-run Phillips curve, we see that they
 
  A) both exist because real wage rate is fixed in the short run.
  B) both exist since money wages are flexible.
  C) each describe different parts of the economy.
  D) describe the same phenomena but contradict each other.
  E) both exist because money wage rate is fixed in the short run.

Question 2

Suppose the economy has no income taxes or imports. The MPC equals 0.8. What does the expenditure model predict will be the change in real GDP if investment increases by 200 billion?
 
  What will be an ideal response?


Dinolord

  • Sr. Member
  • ****
  • Posts: 313
Reply #1 on: Jun 29, 2018
Answer to Question 1

E

Answer to Question 2

The expenditure multiplier equals , so for the case in the question, the expenditure multiplier equals = = 5.0. The change in real GDP equals the expenditure multiplier multiplied by the change in investment, or 5.0  200 billion = 1,000 billion.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

In 1885, the Lloyd Manufacturing Company of Albany, New York, promoted and sold "Cocaine Toothache Drops" at 15 cents per bottle! In 1914, the Harrison Narcotic Act brought the sale and distribution of this drug under federal control.

Did you know?

Recent studies have shown that the number of medication errors increases in relation to the number of orders that are verified per pharmacist, per work shift.

Did you know?

Intradermal injections are somewhat difficult to correctly administer because the skin layers are so thin that it is easy to accidentally punch through to the deeper subcutaneous layer.

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

The human oxygen-hemoglobin dissociation curve. The human oxygen-hemoglobin dissociation curve.
Intussusception. A short length of small intestine has telescoped into itself. Intussusception. A short length of small intestine has telescoped into itself.
Bell Curve for Intelligence IQ scores for a population-based sample usually fall into this kind of Bell Curve for Intelligence IQ scores for a population-based sample usually fall into this kind of
Levels of Processing Affects Long-Term but not Short-Term Memory Levels of Processing Affects Long-Term but not Short-Term Memory
Minerals are nonrenewable resources in limited supply Minerals are nonrenewable resources in limited supply
Short-wavelength flux is reflected by Earth Short-wavelength flux is reflected by Earth
Video: Genetic terms Animation

For a complete list of videos, visit our video library