e. Which price index rises faster, the GDP deflator (Paasche) index or the fixed-weight index (Laspeyres) index 1 Question 3 (20 marks) . . Suppose that an economy’s production function is = . a. What fractions of income do capital and labor receive?
Increase in Retained Earningsd. Increase in Unearned Revenuee. Decrease in Interest Payablef. Increase in Prepaid Insuranceg. Increase in Wages Expenseh.
265). An increase in the real investment or in components of consumption will cause a rise in the real GDP and a decrease in real spending will cause a decrease in the real GDP. To calculate the multiplier one takes 1 and divides it by 1 minus the marginal propensity to consume, which is equal to one divided by the marginal propensity to save. Therefore, the “smaller the marginal propensity to save, the larger the multiplier” and the “larger the marginal propensity to consume, the larger the multiplier” (Miller, 2012, pg. 266).
an upward shift in the supply curve of books. a downward shift in the supply curve of books. Question 9 Starting from a pure exchange equilibrium, an increase in the demand for a commodity will result in: a fall in the market price. a rise in the market price. a rise in the equilibrium output.
What does the Law of Supply say? (0.5 points) that if all other factors are equal, the supply will increase if the price goes up, and the supply will decrease if the price goes
EGT1 Task 1 Lauren Treesh A. Profit Maximization 1. Total revenue to total cost is cost is calculated as, total revenue minus total cost, (TR-TC). As each unit is produced the total cost increases as well as the total revenue. However, at some point in producing additional units, the total revenue will exceed the total cost.
Raises in minimum wage have led to increases in unemployment. ii. The rise in unemployment has been more concentrated amongst those below the current minimum wage level. While these hypotheses have been prevalent, results have ranged from adverse effects to employment1 to unconvincing2.
The diagram above shows that real GDP has increased from Y1 to Y2 which means that economic growth has increased. As a result, unemployment falls as we are getting closer to the inelastic part of the AS curve, which is much needed as “unemployment has shot up” in this economic crisis. However, inflation has risen from P1 to P2 which means that our exports become less competitive so our trade deficit gets worse. However, the rise in inflation is needed as inflation is falling below the 2% target. The changes in the government’s macroeconomic objectives depends on where we are on the AS curve as shown below.
Change in the price level B. Increase in aggregate supply C. Increase in aggregate demand D. Decrease in aggregate demand 3. Which combination of fiscal policy actions would most likely be offsetting? A. Increase taxes and government spending B.
II. An increase in the price of the good reduces consumer’ purchasing power. III. An increase in the price of the good increases consumers’ utility from consuming that good. A. I only B. II only C. III only D. I and II only E. I and III only 2.