« previous next »

Author Question: Comparing the aggregate supply curve and the short-run Phillips curve, we see that they A) both ... (Read 69 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?

Aspirin may benefit 11 different cancers, including those of the colon, pancreas, lungs, prostate, breasts, and leukemia.

Did you know?

The immune system needs 9.5 hours of sleep in total darkness to recharge completely.

Did you know?

The toxic levels for lithium carbonate are close to the therapeutic levels. Signs of toxicity include fine hand tremor, polyuria, mild thirst, nausea, general discomfort, diarrhea, vomiting, drowsiness, muscular weakness, lack of coordination, ataxia, giddiness, tinnitus, and blurred vision.

Did you know?

The most dangerous mercury compound, dimethyl mercury, is so toxic that even a few microliters spilled on the skin can cause death. Mercury has been shown to accumulate in higher amounts in the following types of fish than other types: swordfish, shark, mackerel, tilefish, crab, and tuna.

Did you know?

Anesthesia awareness is a potentially disturbing adverse effect wherein patients who have been paralyzed with muscle relaxants may awaken. They may be aware of their surroundings but unable to communicate or move. Neurologic monitoring equipment that helps to more closely check the patient's anesthesia stages is now available to avoid the occurrence of anesthesia awareness.

Cellular changes associated with short-term and long-term memory in the sea slug. Cellular changes associated with short-term and long-term memory in the sea slug.
Levels of Processing Affects Long-Term but not Short-Term Memory Levels of Processing Affects Long-Term but not Short-Term Memory
A Receiver-Operating-Characteristic (ROC) Curve A Receiver-Operating-Characteristic (ROC) Curve
Answer the following short answer, please show your steps and include the formulas used Answer the following short answer, please show your steps and include the formulas used
Suppose a country imports televisions. The country's supply and demand curves are shown in ... Suppose a country imports televisions. The country's supply and demand curves are shown in ...
Typical bacterial population growth curve showing the initial lag phase Typical bacterial population growth curve showing the initial lag phase
Video: Bipolar Disorder

For a complete list of videos, visit our video library