Minghao Feng ECO 102 B Assignment #6 03/25/2014 SECTION ONE: 1 point Here you will find questions related to chapter 27. a Assume that employers and workers agree that real wages should rise by 2% next year. If inflation is expected to be 2% next year‚ what will workers ask for in regard to wages next year? From the question we know that employers and workers want to raise real wages by 2%. But inflation will be 2% in next year. Actually‚ the employers and workers do not changer
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along the consumption function. 1. Figure 10-8 illustrates a period of a. low unemployment and high inflation. b. high unemployment and low inflation. c. high unemployment and high inflation. d. low unemployment and low inflation. 8. If total spending is greater than current output‚ GDP will rise. 2. Households can finance their consumer spending from current a. none of them. b. income and current wealth. c. wealth. d. income. Figure 10-1 3. If consumers receive an increase
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AGGREGATE DEMAND - the total spending on goods and services in a period of time at a given price level C + I + G + (X – M) C = Consumption o The total spending by consumers on domestic goods and services ▪ Durable goods: used by consumers over a period of time (i.e. cars‚ computers‚ mobile phones) ▪ Non – durable goods: used up immediately or over a short time span (i.e. rice‚ toilet paper‚ newspapers) o Causes of change in consumption ▪ Changes in income –
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Aggregate Demand and Supply Models Aggregate Demand and Supply Models ECO/372 Aggregate Demand and Supply Models The following report will detail out the current state of the U.S. Economy. The report will discuss the following: * Current economic state in regards to unemployment‚ expectations‚ consumer income and interest rates * The existing effect of the economic factors on aggregate demand and supply * Fiscal policies that are currently being recommended by government leadership
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Explain the effects of an increase in aggregate demand. Aggregate demand is a term used by economists to denote the total spending on goods and services produced in an economy. Aggregate demand consists of four elements: consumer spending‚ investment expenditure‚ government spending and the net expenditure on imports and exports. From a Keynesian economist’s perspective‚ they would state that an increase in aggregate demand when the economy is at full employment will be purely inflationary. However
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Southwestern University With the rising demands of a successful football pro gram‚ the campus police chief at Southwestern Uni versity‚ John Swearingen‚ wants to develop a 2-year plan that involves a request for additional resources. The SWU department currently has 26 sworn offi cers. The size of the force has not changed over the past 15 years‚ but the following changes have prompted the chief to seek more resources: · The size of the athletic program‚ especially foot ball‚ has increased. · The
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Aggregate Demand and Supply Models Economic Critique Ken Drake‚ ECO 372 Macroeconomics September 10‚ 2012 Jason Foster Aggregate Demand and Supply Models Economic Critique In the United States the economy is currently in a recession‚ although signs are indicating that the economy is slowly recovering. In an effort to analyze the Unites States economy the unemployment rate‚ expectations‚ consumer income‚ and interest rates have been evaluated. The results of these evaluations are included
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Aggregate Demand and Supply Models ECO/372 07/09/2013 Aggregate Demand and Supply Models As it stands currently the existing effect of the economic factors on aggregate demand and supply are: unemployment‚ consumer income‚ and interest rates. In this paper we identify the existing effect of the economic factors on aggregate demand and supply. The American people have little to no income when unemployed‚ this in turn causes a decrease in demand for the economy. This type
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Given that supply is fixed then at any given quantity of money (M1) there will be a corresponding demand that varies inversely to the price level‚ i.e. a downward sloping demand curve and there will be an equilibrium price level that ‘clears the market’‚ i.e. demand equals supply. If the quantity of money is increased (M2) the demand curve will shift to the right‚ i.e. at the same price level demand will increase but‚ again‚ supply is fixed. A new equilibrium will be established at the same level
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Labor – wages · Capital – interest · Entrepreneurship – profit The important principle: In any given time period‚ the value of output produced by an economy is equal to the total income that is generated in producing the output‚ which is equal to the expenditures made to purchase that output Value of output produced = total income generated = expenditure made to purchase Leakages | Injections | Saving | Investment | Taxes | Government Spending | Imports | Exports |
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