\text{Adjustment} \hspace{54pt} \text{Assets} \hspace{105pt} \text{Stock} \hspace{36pt} \text{Earnings}\\ Incorrect: The largest component of gross domestic income is wages, which are about three times as large as profit. "Corporate profits are much too high: Most corporations make profits equal to 50 percent of the price of the products they sell.". Consider the following closed-economy IS-LM model: Consumption function Investment function Government purchases and taxes Money demand function Money supply Price level : C = 800 + 0.80 (Y - T) : I, Suppose that some CPI data for a particular economy is shown in the following table. Explain your graph. All rights reserved. According to the CAGE framework, which of the following is an example of a product most affected by economic distance? Note that consumption does n, Consider a Solow growth model with no population growth. Production and Prices in Year 1 (Base year) Show calculations. \hline Currently, each factory is producing 1,000 boxes of taffy at the same total cost. 4. Velocity and the quantity equation 4. Velocity an.docx The following table shows the prices and quantities of the goods over a three-year period. These are your only costs. 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. All other trademarks and copyrights are the property of their respective owners. b) Solve for the short-run cost function (, When the costs of a good are paid for by nonconsumers, _______ of the good is produced. If the wage rate is $15 and the firm has sunk costs of $1000 what is the firm's total cost fu, You estimate a short-run production function to be Q = 16L^{0.8} which gives a Marginal Product of Labor function MPL = 0.8*16L^{-0.2} = 12.8/L^{0.2}. "If a recession is so severe that the price level declines, then we know that both real GDP and nominal GDP must decline." Rajiv manages a grocery store in a country experiencing a high rate of inflation. Consider two products, cloth and machines. GDP would be much higher than it is, but the well-being of the typical person would not necessarily be higher. What is the cost of one more beer? Consider a simple economy that produces only pies. The following table The following table contains information on the economy's money supply, velocity of money, price level, and output. GNP is the value of final goods and services produced by residents of the U.S. Personal income will Assume that there are two sectors, manufacturing and farming. The country has a constant technology, population and capital stock (in other words, real GDP is constant throughout). The Fisher effect and the cost of unexpected inflation Assume the following production possibilities data are for a small country off the coast of South America. Assume it is currently in its initial steady state. Household production and the underground economy. 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 cell phones. Find short-run equilibrium output. Inflation \ rate \ from \ 2011 \ - \ 2012 \ = \ 5\% b. multiproduct firms will enjoy a cost advantage because they have the opportunity to divide their pool of worker, Consider three firms: firm A, a mining enterprise; firm B, a steelmaker; firm C, a car-maker. . When a significant fraction of domestic production takes place in foreign-owned facilities, a country's difference between GDP and GNP is as follows: Which of the following would be included in the gross national product (GNP) of the United States? 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. Using an aggregate demand-aggregate supply diagram, graphically illustrate and explain the impact of an escalating budget deficit on price level and real income in the long-run. Derive an equation for the (short run) average product of labor and for the short run marginal product of labor. Find the Marginal Product of Labor (MP_L). The following table contains information on the economy's money supply, velocity of money, price level, and output. 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. Question: Consider a simple economy that produces only cell phones. - opportunity costs. . All numbers are in millions of dollars. The equation of exchange Consider a simple economy that produces only d) All of the above are correct. Consider a simple economy that produces only cell phones. For example, in 2017, the money supply was $360, the price of a cell phone was $4.50, and the economy produced 800 cell phones. Money \ supply \ grew \ = \ \dfrac{12}{240} \ \times \ 100 You are dealing with the concept of - comparative advantage. NI = NNP - Indirect Business taxes =11900 - 40 = 11860 Not copy pasted answer from google. It can produce two goods, apples and bananas. Instruction: E, The following table shows prices an quantities for two goods over three different time periods. National income will a) The GDP of this country would be $ million. The following table contains information on the economy's money supply, velocity of money, price level, and output. Nominal GDP will be less than real GDP if the price level falls and is lower than the base year's prices. 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. The first event is recorded as an example. Which of the following is NOT a shortcoming of GDP as a measure of well-being? The following table contains information on the economy's money supply, velocity of money,. a. Last year, she purchased $7,000 worth of scrap metal. Looking at GDP data from the United States from 2001 to the present, what would be true of the relationship between nominal GDP and real GDP? The firm pays a wage of $30 per units and pays a rental rate of capital $10 per unit. Denim pants 80 $40 100 $50 Assume that the market clearing assumption should and that Labor receives a wage equal to the MPL (dY/d, The first principle of economics is that people face trade-offs. -When income is $11,000, consumption spending is $7,300. How much L to use to maximize the marginal product of labor? For. Product Market C = Ca + 0.7(Y - T) ; Ca = 1,000 - 10r ; T = 100 + 0.15Y ; Ip = 3,500 - 20r ; G = 3,000 NX = 2,000 - 0.4Y Money M. Quantecon is a country in which the theory of money operates. b. Velocity and the quantity equation Consider a simple economy that produces only cell phones. The price of a unit of beef = $19 and the price of a unit of soy = $14. GDP is not adjusted for crime or other social problems. In 2015, the economy produced 70 flashlights and 40 fishing lures, and the prices of flashlights and fishing lures were $5 and $12, respectively. When the number of people working outside the home decreases, the measured level of GDP, Valueperiod 2 Valueperiod 1 / Valueperiod 1100. In the short run, the firm has 16 units of capital. 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? (Enter your response as an integer.) Solved Consider a simple economy that produces only cell - Chegg How do they affect the environment and economy? The following table contains information on the economy's money supply, velocity of money, price level, and output. GDP only counts final goods and services and not intermediate goods. The price of output is 'p,' the, Suppose a firm's short-run production function is given by Q = F(L) = 10L. d. spending and output. Suppose the production function is q=L^{0.75}K^{0.25}. The Inflation rate from 2017 to 2018 was remain the same Calculate the amount for consumption. Also suppose the economy is operating at full employment. B. fully employing all economic resources. There are three productive factors. 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. Fill in the missing values in the follow selecting the answers closest to the values you calculate. Price \ of \ cell \ phones \ (2012) \ = \ \$7.56 The following table shows two scenarios: a low-inflation scenario and a high-inflation scenario. 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. copyright 2003-2023 Homework.Study.com. When the pric, Suppose an economy is characterized by the Solow model. What do you suppose determines the, Suppose the marginal product of labor is 10 and the marginal product of capital is 8. Now consider the long-run impact of the change in money growth and inflation. \\ b. Apple Inc. pays the designe, Suppose the following information describes a simple economy. = 11860 - 1250 + 600 = 11210 a. Graph Home's PPF, with apples in the horizontal axis, b. List 3 factors that can change the economy's potential output. The following table contains information on the economy's money supply, velocity of money, price level, and output. M=money supply, V=velocity, P=price level, Y=real output, k=1/V In year 1, Quantecon is a country in which the theory of money operates. 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. Since cell phone output did not change from 20 money the change in the money supply was reflected in changes in the pr 2017 to 2018 was What is the best. Discover the causes of inflation and how to calculate it. What is the short-run production function? \hspace{28pt} \text{NA} \hspace{29pt} \text{-4,500} \hspace{40pt} \text{NA} \hspace{55pt} \text{NA} \hspace{45pt} \text{-4,500}\\ 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. b. spending and income. Few foreign firms maintain facilities in the U.S. while many U.S. firms are currently operating abroad. Agree. Question Velocity and the quantity equation Consider a simple economy that produces only cell phones. Pineapples 50,000,000 lbs. Each sector employs capital and labor and its production function exhibits constant returns to scale and, 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. Draw graphs to support your answer. Show how the event and its related adjusting entry affect the accounting equation. Consider a simple economy that produces only cell phones. Disposable personal income Consumption 0 100 100 120 200 140 300 160 a. A. diseconomies of scale; expanding B. economies of scale; contracting C. diseconomies of scale, Suppose a firm's production function is given by Q= L^1/2 * K^1/2.The marginal product of labor and the marginal product of capital is given by: MPL= K^1/2 /2L^1/2 and MPk= L^1/2/2K^ 1/2. {/eq}, {eq}Money \ supply \ grew \ = \ \dfrac{252 \ - \ 240}{240} \ \times \ 100 The inflation rate from 2017 to 2018 was. What are consumer goods? 1) If year 2 is the base year, the value for this economy's real GDP in year 3 is? a. The following table contains information on the economy's money supply, velocity of money, price level, and output. \hline \text { all others } & & & & & \\ For example, in. \hspace{23pt}\text{a} \hspace{27pt} \text{-6,000} \hspace{22pt} \text{+6,000} \hspace{40pt} \text{NA} \hspace{55pt} \text{NA} \hspace{52pt} \text{NA}\\ Chapter 30 Post-Class Assignment Part II: Money Growth and - Quizlet b) Suppose five of the planes produced were now sold overseas rather than domestically. Price and quantity data are as follows: Inflation-induced tax distortions All rights reserved. The soda, pizza and cheese companies employ labor and land to produce their products. Since cell phone output did not chang money the change in the money supply was reflected in changes 2017 to 2018 was In 2015, the economy produces 1,000 tonnes of apples, 2,000 tonnes of oranges, and 3,000 tonnes of bananas.
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