18.Graphically illustrate an economy experiencing a recessionary gap in the short-run and discuss and graph what is likely to occur in the long-run to eliminate the recessionary gap. Yaa + os
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- Suppose concerns about the size of the federal budget deficit lead the U.S. Congress to cut all funding for research and development for ten years. Assuming this has an impact on technology growth, what does the AD/AS model predict would be the likely effect on equilibrium GDP and the price level?Suppose 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 level.Given the macro economic data below, draw a graph to illustrate if there is arecessionary gap in the given economy.Real GDP $1000BConsumption (100K is Autonomous) $600BInvestment $100BGovernment Spending $200BExport $50BImport $50BMarginal Propensity to Consume 0.50 AD (Expenditure) 45 degree AD = AS $ 1000B AS (Real GDP) a. Calculate the size of the recessionary gap in the economy. b. What would happen to the recessionary gap if the government cut incometaxes by $50B? c. What would happen to the recessionary gap if the Fed increased discountrates? Explain your answer.
- 1. Key facts about economic fluctuations The graph included below approximates United States business cycles between quarter one of 1947 and quarter three of 1951. The shaded region denotes periods of six or more consecutive months of declining real gross domestic product (real GDP). W 1048 1040 1000 YEAR REAL GDP (Billions of dollars) 2170 2070 1970 1870 1770 1047 1001 Source: "Current-dollar and Real GOR" Bureau of Economics Analysis. last modified May 1, 13. accessed May 15. 13. http://www.bea.gov/national/xl/gdplev.. Notice that real GDP trends upward over time but experiences ups and downs in the short run. These short-run fluctuations in real GDP are often referred to asThe figure below depicts the economy of Altrua, which is presently in equilibrium. Enter your responses below rounded to one decimal place. AS AD LAS 340 360 380 400 420 440 460 480 500 520 Price level a. The size of its recessionary gap is $ b. The size of this gap as a percentage of its actual GDP isIllustrate and interpretthe short-run andlong-run aggregatesupply curves
- An economy is at full employment. Which of the following events can create a recessionary gap? A.An increase in foreign income. B.An increase in government spending. C.An increase in taxes. D.A decrease in nominal wages.Use the information in the following table to do exercises 8-15: silt 1 $20 $20 $4800 $20 $700xi $660 $20 Y $100 $300 $500 с $120 $300 G $30 $30 $30 $30 X $10 -$10 -$30 0-$50Math It Graph It Write It 1. Using the following table and the principles of the circular flow model, determine this economy's GDP. Briefly describe the strategy used to arrive at GDP. Is this economy at a general equilibrium? Why or why not? If this economy has a money stock of $800.00, what is the flow? Remember, economists may multiply stock times flow to arrive at GDP. Show your work. Consumption $1,500. Savings 75. Тахes 100. Capital Purchases 100. Inventory Decreases 50. Government Purchases 200. Transfer Payments 50. Exports 75. Imports 150.
- The following are variables that may cause shifting of aggregate demand (AD) curve. Discuss the effect of increasing these variables to the aggregate demand. Use graphical approach to demonstrate the effect of increasing of each variable and explain why the AD curve shifted. a. Interest rate (domestic) b. Government expenditure (domestic) plzz explain itAssume an economy operates in the intermediate range of its aggregate supplycurve. For each of the following changes in conditions, state the direction of theeffect on:1. aggregate demand, 2. aggregate supply, 3. price level, and 4. real GDP. (a) An increase in government expenditure in infrastructureClick or tap here to enter text.(b) A severe recession occurs in a country, which has been a major importer of thenation’s exports.Click or tap here to enter text.(c) The federal government increases business taxesClick or tap here to enter text.(d) The Central Bank increases the cash interest rateEconomics 3. Suppose the economy is in a recessionary gap.( the economy is not self-regulating and consider upward sloping SRAS ) If government spending increases by $30,000 but private investment reduces by $25,000 at the same time, will increase in government purchase lead the economy to long run equilibrium in goods and service market? Why or why not? Explain with AD-AS graph.