Nominal GDP (Dollars) Year Velocity of Money Quantity of Money (Dollars) 200 202 Price Level Quantity of Output (Dollars) (Pens) 5.00 400 400 2017 2018 The money supply grew at a rate of from 2017 to 2018. You'll get a detailed solution from a subject matter expert that helps you learn core concepts. Graph the PPC for both Countries. Many U.S. citizens currently work in foreign countries while few foreign citizens currently work in the U.S. A) emplo, Suppose in the short run a firm's production function is given by Q = L^{1/2}K^{1/2}, and that K is fixed at K = 36. The inflation rate from 2011 to 2012 was __________ (5%/2.44%/1.44%/105). A. Assume the following production possibilities data are for a small country off the coast of South America. What do you suppose determines the sh, Suppose we have a two good economy that produces beef and soy. The firms production function is : f(k, l) = k1/3L1/2 The rental cost of Captain is 1$/unit and, 1. Use a solow diagram to explain how the economy behaves ov. Suppose also that we produce 125 units of beef and 460 units of soy. [Solved] Part- 3 Chapter- 15Aplia Homework: The Debate over b. an economy will automatically seek the level of output at which, In the long run, a firm that produces and sells textbooks gets to choose: a. The size of its factories, c. Which short-run average-total-cost curve to use, d. All of the above are correct, Suppose in the short run, a firm is able to adjust the amount of labor (L) while the amount of capital (K*) is fixed. Textbooks 15 90 20 100, Real GDP in 2009 equals $6680. B) For what values of labor does increasing marginal product exist? Transfer Payments 600 If the wage rate is $4 and the price of capital is $6, then in order to minimize costs, the firm should use: a. more labor and less capital. Suppose an economy producers three goods: Apples, oranges, and bananas. Nineteen percent of employers provide a one-day paid holiday with workers off Thanksgiving Day. Question: Consider a simple economy that produces only cell phones. \\ a. This country produces both goods (clothing with capital and labor; food with land and labor) and imports food. Suppose there are two closed economies: Economy A and Economy B. For example, in 2017, the money supply was $200, the price of a pen was $5.00, and the economy produced 400 pens. Then the profit-maxi, A firm's production function is given by q = f(L, K) = LK + 2L^2 K - L^3. Consider a simple economy that produces only cell phones. List 3 factors that can change the economy's potential output. C. each additional unit is cheaper to produc, When economies of scope are strong, a. large-scale, single-product firms will be able to reach a minimum efficient scale (MES) more quickly. Suppose that John, April, and Tristan have two production plants for producing orange juice. Pineapples 50,000,000 lbs. Which of the following statements is CORRECT? 1.44% Quantity of Money (Dollars) Price Level (Dollars) Quantity of Output (Cell phones) Nominal GDP (Dollars) ve 2.44% Year Money 500 2017 240 7.20 5% 500 2018 252 105% The money supply grew at a rate of from 2017 to 2018. Assume that the wage rate is $20. Quantity of Money Price Level Quantity of Output Nominal GDP (Dollars) Velocity of Money (Dollars) (Cell phones) (Dollars) 2017 240 7.20 500 2018 252 500 Year 15 The money supply grew at a rate of fram 2017 to 2018. Now suppose the Fed unexpectedly increases the growth rate of the money supply, causing the inflation rate to rise unexpectedly from 4% to 6% per year. You have 3 workers: worker A, B, and C. Worker A can produce 4 tables or 8 chairs in one day. Consider the following simple model of an economy: C = 1,000 + .85(Yd) I = 780 - 800r G = 1,000 T = -50 + 0.09(Y) IM = 100 + 0.1(Y) EX = 100 + 0.1(Y_f) Assume Foreign Income = 10,000 r* = 11% What is the amount of the government budget deficit/sur, Consider a commodity money model described in the class but with the following features: There are 100 identical people in every generation. Suppose you have the following disposable income and consumption data for an economy, as shown in the table below. GNP $13,300 Product Quantity Price Per Unit Aggregate supply describes a relationship between? Assume that K is fixed at 10 in the short run. Will you buy a flat screen or 3D television? Consider a simple economy that produces only cell phones. \hline \text { white, male } & 210 & 3,360 & 13,610 & & 22,050 \\ b) Suppose five of the planes produced were now sold overseas rather than domestically. When GDP is computed using the base year prices, it is referred to as real GDP. 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. Capital goods last an average of 50 years ( O, When economies of scale exist, firms with a large volume of production will have lower costs than firms with smaller volumes of production. In this economy, equilibrium GDP is ? A Bureau of National Affairs survey found that 79% of employers provide their workers with a two-day paid Thanksgiving holiday with workers off both Thursday and Friday (USA Today, November 12, 2009). a. not change GDP or the category under which the spending is counted. L stands for number of workers. Question: Consider a simple economy that produces only pens. 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. Household production and the underground economy. In 2016, the economy produced 85 f, Consider a firm with the production function, q=(K^1/2+L^1/2)^2. If the GDP deflator in 2012 has a value of 98.0, then. Fill in the missing values in the following . Price and quantity data are as follows: GDP deflator = Nominal GDP / Real GDP 100. In the United States, the difference between GNP and GDP is _________ that of many other countries. Quantity of Money Price Level (Dollars) Quantity of Output (Cell phones) Nominal (Dolla: Year Velocity of Money increased 2017 7.20 500 2018 decreased 15 500 remained the same The mo rate of from 2017 to 2018. (Solved) - Consider a simple economy that produces only cell phones What he can't spend, he converts into a more stable foreign currency for a steep fee. - Definition & Formula. If you were attempting to forecast the level of consumer spending by households, which measure of total production or total income might be most helpful in making your forecast? The economy has two sectors-cloth and food. 2000 (Base Year) 2009 How do they affect the environment and economy? b. The marginal product of oranges in one plant is MP^1=1000-O_1, Which of the following could be evidence of a market failure? Also suppose the economy is operating at full employment. "If real GDP stayed the same while nominal GDP declined between 2008 and 2009, then the GDP deflator must also have declined.". Identifying costs of inflation The total amount of money received in an economy by it, Use examples to distinguish between the resource market and the product market in the circular flow model. Nominal GDP can increase if output falls and prices rise. Suppose GDP in this country is $1,175 million. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. a. Take the following information as given for a small, imaginary economy: -When income is $10,000, consumption spending is $6,500. Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{0.36}{7.2} \ \times \ 100 The following table contains information on the economy's money supply, velocity of money, price level, and output. Suppose the production function is q=L^{0.75}K^{0.25}. What do you suppose determines the, Suppose the marginal product of labor is 10 and the marginal product of capital is 8. Fill in the missing values in the. The following table contains information on the economy's money supply, velocity of money, price level, and output. With the steel she produced 10 authentic sculptures that she sold for $1,000 each to a local art dealer. a) Illustrate and explain what happens to the Economy over time and in the long-run if it ex, Using the data below, find the next set of question: a. \hline \text { black, female } & 0 & 40 & 270 & & 330 \\ Is it true that in a short-run production process, the marginal cost curve eventually slopes upward because firms have to pay workers a higher wage rate as they produce more output? Denim Value+Wine Value + Textbook Value= RGDP B. the economy is near full capacity. a) What is the price level and money supply? Instruction: E, The following table shows prices an quantities for two goods over three different time periods. . If the equilibrium quantity of airplanes demanded is 200, can this economy take full advantage, The table below shows how the average cost of production for airplanes at a certain factory changes as the number of airplanes built at that factory increases. In the U.S., gross domestic product (GDP ) and gross national product (GNP) are close in value. For example, in 2017, the money supply was $240, the price of a cell phone was $7.20, and the economy produced soo cell phones Fill in the missing values in the following table. See answer Advertisement topeadeniran2 NNP = GNP - Depreciation = 13300-1400 = 11900 If the price of labor, w = $12 per unit of labor, what is the firm's marginal cost of production when the firm is producing 48 units of output? TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500. M=money supply, V=velocity, P=price level, Y=real output, k=1/V If in year, The determinants of aggregate supply: are consumption, investment, government, and net export spending. Consider a simple economy that produces only croquettes. The following table contains information on the economy's money supply, velocity of money, price level, and output. The following table contains information on the economy's money supply, velocity of money, price level, and output. The following table contains information on the economy's money supply, velocity of money, price level, and output. The nominal interest rate on the bonds adjusts automatically to account for the inflation rate. The following table contains information on the economy's money supply, velocity of money, price level, and output. Personal Tax Payments 1,500, National income (NI) equals $11860 billion. How many workers to hire, b. This firm operates in the short run where capital (K) is fixed at a quantity of 16. There are two goods, Coal and Wheat, produced with two factors of production, capital and labour. In the short-run, the level of capital is fixed. REQUIRED Inflation reduces the purchasing power of the currency and also reduces the return on investment. Find the equilibrium real interest rate. What is t, Both Kate and John own saltwater taffy factories. Suppose a production function is q = K^(1/2)L^(1/3) and in the short run capital (K) is fixed at 100. Suppose we have a small economy that produces only two goods The following table contains information on the economy's money supply, velocity of money, price level, and output. Decrease \hline \text { white, female } & 80 & 580 & 3,380 & & 4,930 \\ remain the same Suppose you are deciding whether to spend your tax rebate check on AirPods or save the money for a new smart phone. Velocity and the quantity equation Consider a simple economy that produces only pens. Find a new equilibrium. Below is a Production Possibilities Table of Consumer Goods (things that consumers buy to satisfy wants) and Capital Goods (things that businesses buy to make them more productive). NI = NNP - Indirect Business taxes =11900 - 40 = 11860 The purchase of tires from Bridgestone tire company by an automobile manufacturer. \end{array} The firm pays a wage of $30 per units and pays a rental rate of capital $10 per unit. a. 4. Draw the short run Phillips curve and relate it to our economy today. Derive the base-year-quantity price index. As we read this unit, how does the circular flow model illustrate how our economy works? Complete the second row of the table by filling in the expected and actual real interest rates on car loans immediately after the increase in the money supply (MS). Even if GDP included these types of production, why would it still be an imperfect measure of economic well-being? The price of a unit of beef = $19 and the price of a unit of soy = $14. b. Think about the following news item. If th, Suppose that this year's velocity is 10, nominal GDP (PY) is $50 billion, and real GDP (Y) IS $10 billion. He is paid in cash twice per month. Solved Consider a simple economy that produces only cell - Chegg In 2011, the value of the GDP deflator is, Based on the table, in Year 2, the value of the GDP deflator is 1960/1680 x 100 =, A simple economy produces two goods, Corn Bread andVideo Games. For example, in 2017, the mon. Under a perpetual inventory system, acquisition of merchandise for resale is debited to: The event requires a year-end adjusting entry. All numbers are in millions of dollars. Consider a simple economy that produces only cell phones. The government places a modest minimum wage on this industry above the market clearing equilibrium wage. What is the marginal pro. Consider a simple economy that produces only pens. The following table Numerically. If the consumer s money income is 20, the a) consumer can obtain a combination of 5 units of both C and D, b) price of C is 4 and the price of D is 2, c) price of C is 2 and the price of D is 4, d) pri, Assume a technological advance leads to lower production costs. Explain the following terminologies in economics Spreading the overhead. (less than), Consider the following simple economy that produces only three goods: Production Combin, Consider the following information describing an economy with demand-determined output. The inflation rate from 2017 to 2018 was. Agree. For example, in 2019, the money supply was $240, the price of a cell phone was $7.20, and the economy produced 500 cell phones. These sweaters are made using a combination of labor and knitting machines. B. all things are produced by the people of the lowest wage rate. {eq}Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ \dfrac{7.56 \ - \ 7.20}{7.2} \ \times \ 100 Further, assume th, Suppose that the table below shows an economy's relationship between real output and the inputs needed to produce that output: Input Quantity Real GDP 300.00 $400 225.00 300 150.00 200 a. The total costs C of a firm is: C = 4K + L. a. 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. \\ b. Apple Inc. pays the designe, Suppose the following information describes a simple economy. The following table contains information on the economy's money supply, velocity of money, price level, and output. Solved Consider a simple economy that produces only cell - Chegg Assume Government cut income taxes by 10. (Enter your response as an integer.) The following table contains information on the economy's output, money supply, the velocity of money, and price level. Draw a production possibility curve (PPC). C. maximizing the returns to factors of production. Velocity and the quantity equation Consider a simple economy that produces only pens. Disposable personal income Consumption 0 100 100 120 200 140 300 160 a. Conversely, when calculated using current year prices it is called nominal GDP. Carrie's marginal utility per dollar from increasing cons. All other trademarks and copyrights are the property of their respective owners. Figures are in billions of dollars. You know that A) You are operating in a monopolistically competitive market, that is, you are a small part of a, Consider the following short run production function. If the wage is $10 and the rental rate on capital is $20, the short run marginal cost is _____. b. spending and income. - opportunity costs. = 11860 - 1250 + 600 = 11210 b. The following table contains information on the economy's money supply, velocity of money, price level, and output. Investment is equal to 400. This is an example of the ___________ of inflation. Velocity and the quantity equation Consider a simple economy that produces only cell phones. Currency: $1,000 Checking Account Balances: $2,000 Savings Account Balances: $5,000 Small-Denomination T. Define Economy and list all inputs and outputs need 100 words at least. GDP Example Problems Flashcards | Quizlet TotalAssetsStockholdersEquityEvent/Cash+Other=Liabilities+Common+RetainedAdjustmentAssetsStockEarningsa-6,000+6,000NANANAAdj.NA-4,500NANA-4,500\begin{array}{lrr} Suppose the base year is 2001. Real GDP = 137.5 x 1 + 1350 x 30 = 40637.5, Billions of dollars b) the size of its factories. _______ per year. Show more Business Economics Answer & Explanation Solved by verified expert GDP only counts final goods and services and not intermediate goods. Get access to this video and our entire Q&A library, What Is Inflation Rate? B. more labor and less capita, Suppose a firm's production function is given by the equation Q = 12L^.5K^.5 . The total value added of the artist is $3000. Agree. The government cuts public spending. Calculate the velocity of money. Suppose tha, Refer to the data in the table below. Com, Consider the Small Open Economy Model. Assume that this economy is currently at point "C". . 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. 3. Compared with lower inflation rates, a higher inflation rate will ______ the after-tax real interest rate when the government taxes nominal interest income. d. provide minimum incomes for, Consider the following changes in the economy. Fill in the missing values in the following table, selecting the answers closest to the values you calculate. Response has to be original. Since cell phone output did not chang money the change in the money supply was reflected in changes 2017 to 2018 was Live Happley's production schedule for strawberries is given in t, Assume an industry uses labor and capital in its production process. b. Do not include "all others" for parts fff and ggg. Points: 1 / 1 Close Explanation 4. (a). Calculate the GDP of this economy by the product and the expenditure approach, assuming that all values ar, Which of the following would show an efficient economy? Suppose that a simple economy produces only the following four goods and services: shoes, hamburgers, shirts, and cotton. Note that consumption does n, Consider a Solow growth model with no population growth. \hspace{7pt}\text{Event/} \hspace{20pt} \text{Cash} \hspace{5pt}+ \hspace{10pt} \text{Other} \hspace{5pt} = \hspace{10pt} \text{Liabilities} \hspace{5pt} + \hspace{10pt}\text{Common} \hspace{5pt} + \hspace{5pt} \hspace{5pt} \text{Retained}\\ The following table contains information on the economy's money supply, velocity of money, price level, and output. Given the real interest rate of 4.5% per year, find the nominal interest rate on Gilberto's bonds, the after-tax nominal interest rate, and the after-tax real interest rate under each inflation scenario. For example, in 2011, the money supply was $240, the price of a cell phone was $7.20, and the economy produced 500 cell phones. Economists tend to assume that a firm's production function is subject to increasing returns to scale, when the amount is small, and to decreasing returns to scale, when the output is large. Using Aggregate Demand and Aggregate Supply, explain the effect of a decrease in Lump Sum Taxes on the price level and GDP in the short run (i.e., until the end of the first period) on the level of ou, Consider an economy described by the production function: Y = F(K,L) = K^{(0.32)}L^{(0.68)}. Capital and land are fixed factors while labor can move, Consider Australia as a small open economy. Which of the following st, Quantecon is a country in which the theory of money operates. Find the probability that a randomly selected individual was a white male. Question Velocity and the quantity equation Consider a simple economy We will let suicide victims be our population. RGDP < NGDP because prices are rising. C. all things are produced at the lowest cost. (Enter your response as an integer.) Consider the following information: State of Economy Probability of State of Economy Rate of Return if State Occurs, In a simple economy (assume there are no taxes, thus Y is disposable income), the consumption function is: C = 200 + 0.8Y.
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