Question

How would you define short-run fluctuation or ‘detrended output’. Provide the formula.

How would you define short-run fluctuation or ‘detrended output’. Provide the formula.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The portion of production not explained by the long-run trend is called short run output. Short-run output is a key variable studied int he theory of economic fluctuations. It is commonly measured in percentage terms and denoted by the variable tildeY(with ~ over it). Economists also refer to this as "detrended output". It is the difference in actual and potential output, expressed as a percentage of potential output.

Detrended output and can be found by subtracting the potential output from the actual output and dividing by the potential output
Yt~ = Yt - Ytbar / Ytbar

Where Yt~ is Detrended Output, Yt is Actual Output and Ytbar is Potential Output.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Define aggregate supply (AS) and explain how it differs in the immediate short run, the short...
Define aggregate supply (AS) and explain how it differs in the immediate short run, the short run, and the long run  (what are the key assumptions about wages and prices in each of those cases?)  
Using the sticky wage theory or thr sticky price theory, why would a short run output...
Using the sticky wage theory or thr sticky price theory, why would a short run output deviate from potential output and how would the economy return to the long run rate of output?
If the economy begins at a short-run equilibrium below potential output, then there would be upward...
If the economy begins at a short-run equilibrium below potential output, then there would be upward pressure on wages but not prices upward pressure on prices but not on wages downward pressure on wages but not on prices downward pressure on both wages and prices If the economy is at a short-run equilibrium above potential output, which of the following would occur upward pressure on wages because the labor market is operating above full employment upward pressure on wages because...
Derive the aggregate labor demand curve and define the short-run determinants of aggregate labor demand, labor...
Derive the aggregate labor demand curve and define the short-run determinants of aggregate labor demand, labor supply and labor force participation. How would involuntary unemployment arise in such a labor market? Discuss how the level of real output is determined in the Snowden and Vane Classical Model.
For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap....
For the following economy, find autonomous expenditure, the multiplier, short-run equilibrium output, and the output gap. By how much would autonomous expenditure have to change to eliminate the output gap? C = 450 + 0.75 (Y – T ) I p = 200 G = 140 NX = 60 T = 100 Y* = 3,200 Instructions: Enter your responses as absolute numbers. Autonomous expenditure:    Multiplier:    Short-run equilibrium output:    There is  (Click to select)  a recessionary  an expansionary  no  output gap in the...
When the economy is in a short-run equilibrium, with output greater than potential GDP, the short-run...
When the economy is in a short-run equilibrium, with output greater than potential GDP, the short-run aggregate supply curve will shift to the left. Why would this happen? With output above potential GDP, the economy produces too many goods and those goods are sold at prices that are too high. This happens only after government interference. With output above potential GDP, wages will be bid up and the expected price level will rise from the increase in the actual price...
How would you define the concept of "passive income"? Any examples you can provide? Would you...
How would you define the concept of "passive income"? Any examples you can provide? Would you be subject to passive income rules? I have already used Rental proferties for one example of passive income.
How can a country increase output in the short run and maintain a fixed exchange rate...
How can a country increase output in the short run and maintain a fixed exchange rate in the same time, using monetary policies?
What would happen to output and the price level in the long run if the Fed...
What would happen to output and the price level in the long run if the Fed increased the money supply? What would happen to output and the price level in the short run if government expenditure permanently declined? Use our AS-AD framework for this question.
Monetary policy is effective in affecting output int he short-run because: a. prices are fixed in...
Monetary policy is effective in affecting output int he short-run because: a. prices are fixed in short run b. prices are fixed in long run c. prices are flexible in short run d. output is flexible in long run
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT