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Macroeconomics
Explore questions in the Macroeconomics category that you can ask Spark.E!
- When the economy is on the short-run aggregate supply curve and to the left of the long-run aggregate supply curve, actual aggregate output will eventually equal potential output as:
- If the planned aggregate spending rises by $25 billion and the MPC is .8, then GDP changes by:
- The interest rate effect states that as the aggregate price level rises, holding everything else constant, people demand:
- Use Table 16-3. If real GDP is $3,000 billion, then unplanned investment will be:
- Suppose investment spending increases by $50 billion, and as a result real GDP increases by $200 billion. The value of the MPC is:
- The slope of the planned aggregate spending line is determined by:
- The aggregate demand curve is negatively sloped in part because of the impact of interest rates on:
- According to the aggregate demand curve, when the aggregate price level _________, the quantity of _________.
- Suppose that a financial crisis decreases investment spending by $100 billion and the marginal propensity to consume is 0.80. Assuming no taxes and no trade, by how much will real GDP change?
- An increase in the wealth of households, all other things unchanged, may be expected to result in _______ the aggregate consumption function.
- Scenario 16-2: Income-Expenditure EquilibriumSuppose GDP is $8,000, autonomous consumption is $500, and planned investment spending is $200. The marginal propensity to consume is 0.8.Use Scenario 16-2. At the current level of GDP, how much is unplanned inventory investment?
- 1. reduced taxation (increases disposable income)2. weak exchange rate (boost export growth)3. lower interest rates (more credit)- Anything that increases aggregate demand
- a general decrease in the average level of prices, which can be very damaging to an economy
- 1. demand-pull factors2. cost-push factors3. imported inflation4. government-induced inflation
- 1. wage increases 2. higher raw material costs3. higher taxes- Anything that increases a firm's cost of production
- the way in which a central bank affects the amount of money in circulation
- if a banking crisis occurs, ECB can provide emergency liquidity assistance i.e. cheap emergency loans to banks running out of funds
- 1. sole issuer of the euro (print euro currency)2. regulator of the financial sector (credit unions, building societies etc.)3. official external reserves (manages on behalf of country - official holdings of gold, foreign currencies etc.)4. maintains price stability
- 1. borrowing is encouraged and saving is discouraged2. DIRT revenue decreases3. increased demand for houses4. economic growth is encouraged
- any increase in general level of prices due to an increase in costs of production/costs of inputs faced by the employer