Question

In the short run what is a pattern of GDP growth?

In the short run what is a pattern of GDP growth?

Homework Answers

Answer #1

IN the short run the GDP follows the business cycle i.e. it increases which we call expanding the economy will experience an inflation at this point and after reaching a point called peak it declines, this is a recession here the unemployment is high and wages will fall with peoples income. Then again after a point or reaching at the bottom it will start increasing. This process is called a business cycle and the GDP will follow that.

So, in the short run the GDp fluctuates.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What would happen to inflation, GDP, unemployment and economic growth in the short run and the...
What would happen to inflation, GDP, unemployment and economic growth in the short run and the long run if we cut income taxes by 100 billion and the marginal propensity to consume (MPC) is equal to .75? Make sure to include the appropriate equation and an analysis of the impacts of C, I, G, NX, AD, AS, P, Q, inflation and economic growth.
What causes real GDP to fluctuate in the short run? Sometimes, real GDP grows slow, fast...
What causes real GDP to fluctuate in the short run? Sometimes, real GDP grows slow, fast not at all, why is that? What are these fluctuations called?
1. What happens to U.S. real GDP and the price level in the short run, when...
1. What happens to U.S. real GDP and the price level in the short run, when a major trading partner enters a recession (i.e. experience a decrease in their income)? Assume that initially the U.S. economy is at its long-run equilibrium. 2. Suppose an economy is initially at its long-run equilibrium and short run aggregate supply decreases. How do price level and real GDP change in the short run?
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...
1. In going from the short run equilibrium to the long-run equilibrium, briefly explain how the...
1. In going from the short run equilibrium to the long-run equilibrium, briefly explain how the composition of real GDP may have changed. 2. Briefly explain what the difference in the growth rate of potential GDP might occur If instead of a decrease in the net tax rate, there was an increase in government purchases. 3. Briefly explain what the “Money Neutrality” argument implies about the effectiveness of discretionary fiscal policy and the impact on potential real GDP and price...
Consider an economy has had growth in real GDP of 3.1% and growth in the money...
Consider an economy has had growth in real GDP of 3.1% and growth in the money supply of 4.9%. a) If velocity has been constant for this economy, what will be the rate of inflation? b) If instead the velocity had increased by 5.6%, what will be the rate of inflation? c) The quantity theory of money theorizes that the rate of inflation is determined by the growth of the money supply. What is the key assumption for the quantity...
List and briefly describe three theoretical causes of inflation in the short run. If GDP is...
List and briefly describe three theoretical causes of inflation in the short run. If GDP is currently running faster than potential GDP, can we say, based on that observation alone, that inflation will rise in the near future? Why or why not?
AS in the Short Run (Range 2 of AS): There is an increase in U.S. wealth...
AS in the Short Run (Range 2 of AS): There is an increase in U.S. wealth Question 1)      a) AD increases      b) AD decreases      c) AS increases      d) AS decreases Question 2)      a) GDP growth rises      b) GDP growth falls      c) GDP growth remains unchanged Question 3)      a) unemployment rises      b) unemployment falls      c) unemployment remains unchanged Question 4)      a) inflation increases      b) inflation decreases      c) inflation...
AS in the Immediate Short Run (Range 1 of AS): Scenario: There is an increase in...
AS in the Immediate Short Run (Range 1 of AS): Scenario: There is an increase in U.S. government spending Question 1)      a) AD increases      b) AD decreases      c) AS increases      d) AS decreases Question 2)      a) GDP growth rises      b) GDP growth falls      c) GDP growth remains unchanged Question 3)      a) unemployment rises      b) unemployment falls      c) unemployment remains unchanged Question 4)      a) inflation increases      b) inflation decreases...
What is the current GDP growth rate? Also, examine the trend of GDP growth over the...
What is the current GDP growth rate? Also, examine the trend of GDP growth over the past few years. What stage of the business cycle is the U.S. economy currently in given the trend of GDP growth?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT