Question 1

Some critics of the Chinese government accuse it of "manipulating" its currency,the Chinese yuan.Explain the nature of and the effects of this "manipulation".

Accepted Answer

Some critics of the Chinese government a

Question 2

How does the fact that imports vary directly with GDP affect the stability of the domestic economy?

Accepted Answer

Actually this fact should help stabilize

Question 3

Explain how the recession resulting from the financial crisis in the United States in late-2008 was transmitted to Canada.

Accepted Answer

While Canadian banks were largely insula

Question 4

Answer the following questions using the aggregate expenditures model of the economy described below.
C = 80 + .6Yd
T = 40 + .2Y
Ia = 28
Ga = 64
Xa = 76
M = .18Y
(a)What are the marginal propensity to consume,the marginal tax rate,and the marginal propensity to import?
(b)What is the saving function? What is the marginal propensity to save?
(c)What is the aggregate expenditure function? What is autonomous expenditure? What is the marginal propensity to withdraw?
(d)What is the equilibrium level of real GDP?
(e)What is the size of the multiplier?
(f)Suppose the full employment level of real GDP is $340.Does a recessionary gap or an inflationary gap exist? How can the government eliminate the gap by altering government expenditures?

Accepted Answer

(a)The marginal propensity to consume is

Question 5

Compare and contrast the recessionary gap and the inflationary gap.

Accepted Answer

A recessionary gap is the amount by whic

Question 6

Describe the impact of an increase in government spending assuming no change in taxes and less than full-employment output.

Accepted Answer

Assuming no change in taxes,the effect o

Question 7

If there is a recessionary gap of $100 billion and the MPC is 0.8,by how much must taxes be reduced to eliminate the recessionary gap? Assume that prices are stuck and that investment,net exports,government expenditures,and taxes do not change with changes in real GDP.

Accepted Answer

If the MPC is 0.8,then the MPS is 0.2 an

Some critics of the Chinese government accuse it of "manipulating" its currency,the Chinese yuan.Explain the nature of and the effects of this "manipulation".

How does the fact that imports vary directly with GDP affect the stability of the domestic economy?

Explain how the recession resulting from the financial crisis in the United States in late-2008 was transmitted to Canada.

Compare and contrast the recessionary gap and the inflationary gap.

Describe the impact of an increase in government spending assuming no change in taxes and less than full-employment output.

If there is a recessionary gap of $100 billion and the MPC is 0.8,by how much must taxes be reduced to eliminate the recessionary gap? Assume that prices are stuck and that investment,net exports,government expenditures,and taxes do not change with changes in real GDP.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters

Exam 11: The Aggregate Expenditures Model

Some critics of the Chinese government accuse it of "manipulating" its currency,the Chinese yuan.Explain the nature of and the effects of this "manipulation".

How does the fact that imports vary directly with GDP affect the stability of the domestic economy?

Explain how the recession resulting from the financial crisis in the United States in late-2008 was transmitted to Canada.

Compare and contrast the recessionary gap and the inflationary gap.

Describe the impact of an increase in government spending assuming no change in taxes and less than full-employment output.

If there is a recessionary gap of $100 billion and the MPC is 0.8,by how much must taxes be reduced to eliminate the recessionary gap? Assume that prices are stuck and that investment,net exports,government expenditures,and taxes do not change with changes in real GDP.

Limits, Alternatives, and Choices

The Market System and the Circular Flow

Demand, Supply, and Market Equilibrium

Market Failures: Public Goods and Externalities

An Introduction to Macroeconomics

Measuring the Economys Output

Economic Growth

Business Cycles, Unemployment, and Inflation

Basic Macroeconomic Relationships

Aggregate Demand and Aggregate Supply

Fiscal Policy, Deficits, Surpluses, and Debt

Money, Banking, and Money Creation

Interest Rates and Monetary Policy

Long-Run Macroeconomic Adjustments

International Trade

Exchange Rates and the Balance of Payments

Filters