NNP = GNP - Depreciation = 13300-1400 = 11900 At the equilibrium real wage RW0, the country's labor force works L0 hours and produc, Consider an economy described as follows: a. Compute private saving, public saving, and national saving. Suppose tha, Refer to the data in the table below. Points: 1 / 1 Close Explanation 4. Gilberto receives a portion of his income from his holdings of interest-bearing U.S. government bonds. For example, in 2016, the money supply was $360, the price of a cell phone was $9.00, and the economy produced 800 cell phones. The following table contains information on the economy's money supply, velocity of money, price level, and output. The purchase of tires from Bridgestone tire company by an automobile manufacturer. A break-even level of production. \\ Further, assume that all of the cotton is used in the production of shirts. Finally, suppose consumer goods are subject to legal price con, An economy is described by the following equations : C=40+0.8(Y-T) I^p=70 G=120 NX=10 T=150 a) Find the short-run equilibrium GDP for this Economy b) Suppose the potential output for this Economy is $, Consider the information below for a simple economy. . Suppose the production function is q=L^{0.75}K^{0.25}. Using the line drConsider a decrease in the supply of money th, An economy with zero net exports is described below: C= 80 + 0.75 (Y - T) I^p= 100 G= 150 NX= 0 T= 180 The multiplier in this economy is 4. a. Even if GDP included these types of production, why would it still be an imperfect measure of economic well-being? In a certain economy, when income is $100, consumer spending is $60. Corn Bread 110 $1.00 Using this data, compute the value for savings at each level of disposable income. Com, Consider the Small Open Economy Model. Will you buy a flat screen or 3D television? "Whenever real GDP declines, nominal GDP must also decline." \\ 4. Production Combin, Consider the following information describing an economy with demand-determined output. In the U.S., gross domestic product (GDP ) and gross national product (GNP) are close in value. C) the smallest number of firms that co, Suppose the production function for a firm is given by: q=4L^{0.5}K^{0.25}. Ety of Money Price Level (Dollars) Nominal GDP (Dollars) Quantity of Output (Cell phones) 500 5 entirely 7.20 15 from 2017 to 2018. In 1890, the typical American worked 60 hours per week. Year Pencils Muffins Price Quantity Price Quantity (Dollars per pencil) (Number of pencils) (Dollars per muffin) (Number of muffins) 2018 1 120 1 195 2019 2 130 4 195 2020 4 130 4 145 . How do you know? We will let suicide victims be our population. Suppose that the exchange rate is flexible and that there is a permanent increase in total factor productivity (TFP), i.e., both z and z' increase. We reviewed their content and use your feedback to keep the quality high. 2) If year 1 is the base year, the valu. Paul s Pizza Parlor bakes pizza pies according to the following production function: Q = 3L + 0.3L^2 - 5L^3. "If real GDP stayed the same while nominal GDP declined between 2008 and 2009, then the GDP deflator must also have declined.". Take the following information as given for a small, imaginary economy: -When income is $10,000, consumption spending is $6,500. "Corporate profits are much too high: Most corporations make profits equal to 50 percent of the price of the products they sell.". This firm operates in the short run where capital (K) is fixed at a quantity of 16. You will need to give up your current job that pays you $20,000. . \hspace{28pt} \text{NA} \hspace{29pt} \text{-4,500} \hspace{40pt} \text{NA} \hspace{55pt} \text{NA} \hspace{45pt} \text{-4,500}\\ Is the value of intermediate goods and services produced during the year included in Gross Domestic Product (GDP)? The following table contains information on the economy's money supply, velocity of money, price level, and output. C. maximizing the returns to factors of production. What are consumer goods? If the wage is $10 and the rental rate on capital is $20, the short-run average cost is _____, Consider the following firm with the production functionQ = F(L) = 2L^\frac12 L = labor, Wage w=12. d) All of the above are correct. Solved Consider a simple economy that produces only cell - Chegg \end{array} The government cuts public spending. The following table contains information on the economy's money supply, velocity of money, price level, and output. All of the above would push GNP above GDP. The level of prices and the value of money, Money supply, money demand, and adjustment to monetary equilibrium, The classical dichotomy and the neutrality of money, Using money creation to pay for government spending, The Fisher effect and the cost of unexpected inflation. All rights reserved. Conversely, when calculated using current year prices it is called nominal GDP. Consider a simple economy that produces only cell phones. Price \ of \ cell \ phones \ (2012) \ = \ \$7.56 1. The following table contains information on the economy's money supply, velocity of money, price level, and output. The short-run economic outcome resulting from the increase in production costs is known as. Assume an economy where the production function is F(K,L) = L2/3K1/3 if L is 125 and K is 1000. Velocity and the quantity equation Consider a simple economy that produces only pens. Velocity and the quantity equation Consider a simple economy that Discuss with 2 diagrams: (The aid of aggregate output market diagram and money mar, Suppose the information in the following table is for a simple economy that produces only the following four goods: shoes, hamburger, shirts, and cotton. Use the IS-LM-model to explain what happens to national income. If the wage rate is $5 and the price of capital is $2, then in order to minimize costs the firm should use: A. more capital and less labor. d. provide minimum incomes for, Consider the following changes in the economy. Do not include "all others" for parts fff and ggg. . Real GDP falls if output falls. Consider an economy that begins with an output equal to its natural level. Production and Prices in Year 1 (Base year) Since cell phone output did not change from 2011 to 2012 and the velocity of money __________ (increased/decreased/remained the same) , the change in the money supply was reflected __________ (partially/entirely) in changes in the price level. Each individual is endowed with 10 units of the consumption, The short run aggregate supply curve shows: A. what happens to output in an economy as the actual price level changes, holding all other determinants of real GDP constant. In the long run, capital and labor are both varia, The "minimum efficient scale" of operation in an industry is defined as: A) the smallest plant size that can be operated by firms in the industry. The following table contains information on the economy's money supply, velocity of money, price level, and output. Consider a simple economy that produces only pens. 4. Velocity and the quantity equation 4. Velocity an.docx The Nominal GDP for the year 2015 is $7450. B) $4 per unit, and average fixed cost (AFC) is, A firm has the production function q = 0.2LK + 5L^2K - 0.1L^3K. In the best case scenario, the Fed will: a Increase money supply to take the economy to point X. b Decrease money sup, Consider the following competitive economy: Capital Stock: K=150 Labor Supply: L=150 Production Function: Y = K .4 L .6 Consumption Function: C = 10 + 0.7 Y d Investment Function: I = 40 - 100r Government spending: G=30 Taxes: T=30 For this produ, The table below pertains to Wrexington, an economy in which the typical consumer's basket consists of 20 pounds of meat and 10 toys.