Question

What is the short-run effect of a decrease in exports of Australian iron ore on the...

What is the short-run effect of a decrease in exports of Australian iron ore on the Australian economy?

       
A.The economy would enter the recessionary part of the business cycle.

       
B.The economy would enter the expansionary part of the business cycle.

       
C.The economy stays at its potential output level but with higher inflation.

       
D.The economy stays at its potential output level but with lower inflation

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

The exports are very crucial for an economy.Exports can also help Australia's rural and regional areas that may not have shared in the gains from Australia's improved economic performance.

The correct option is (d).

The economy stays at it's potential level of output level but with lower inflation

The potential output will remain the same ,there would be more goods available in econnomy and the inflation rate will decrease.

Hope you got the answer.

Kindly comment for further explanation.

Thanks ?

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
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...
1) If the Federal Reserve conducts an open market purchase, we can expect that the short-run...
1) If the Federal Reserve conducts an open market purchase, we can expect that the short-run Phillips curve will shift left. the short-run Phillips curve will shift right. t here will be a movement to the right along the short-run Phillips curve. there will be a movement to the left along the short-run Phillips curve. the long-run Phillips curve will shift right. 2) In the long run, the Phillips Curve shows that the natural rate of unemployment is independent of...
Please, draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an...
Please, draw Aggregate Demand, Short Run Aggregate Supply, and Long Run Aggregate Supply as if an economy is in both short run and long run equilibrium. Now, Suppose the price of oil (an input in the production of many goods) decreases. Can you please Show how this will affect the model starting from (1) above. What happens to GDP, The Price Level, and Potential Output? Is the economy in a recessionary gap or an inflationary gap? Also, Suppose that consumers...
Australia's economy boomed from 2005 through the end of 2011, in part because of strong Chinese...
Australia's economy boomed from 2005 through the end of 2011, in part because of strong Chinese demand for its commodity exports such as iron ore. According to the short-run model presented in KOM Chapter 15, would you expect the Australian dollar (A$) to have appreciated or depreciated vis-à-vis the U.S. dollar (US$) during this period? Why? Illustrate your answer with a graph.
5- If an economy is in short-run equilibrium where the level of real GDP is less...
5- If an economy is in short-run equilibrium where the level of real GDP is less than potential output, then, in the long run, one will find: A-Nominal wages will rise and the SRAS curve will shift left bringing the economy back to its potential real GDP. B-Nominal wages will rise shifting the AD curve to the right and restoring real GDP to its potential level C-Nominal wages will fall and the SRAS curve will shift right bringing the economy...
Principles of Macroeconomics Q.1 In the short run, firms expand their production when the price level...
Principles of Macroeconomics Q.1 In the short run, firms expand their production when the price level rises because A.the higher prices allow the firm to hire more workers by offering higher wages, thereby increasing productivity and profits. B. each firm must keep its production up to the level of its rivals, and some firms will expand production as the price level increases. C.firms can increase their profits by increasing their maintenance. D.the money wage rate remains constant so the higher...
During the coronavirus pandemic, business shut-downs led to a decrease in short-run aggregate supply an increase...
During the coronavirus pandemic, business shut-downs led to a decrease in short-run aggregate supply an increase in aggregate demand a decrease in potential output (long-run aggregate supply) an increase in short-run aggregate supply Two major items shift the short-run aggregate supply curve without shifting the long-run aggregate supply curve. They are price expectations and technology price expectations and economy-wide input costs technology and physical capital technology and economy-wide input costs In the 1970s, there was a large and sustained increase...
QUESTION 50 Government policy designed to stimulate the economy (move it back to long run equilibrium)...
QUESTION 50 Government policy designed to stimulate the economy (move it back to long run equilibrium) is called a. bogo policy b. expansionary policy c. recessionary policy d. contractionary policy 1 points    QUESTION 51 Two Part Question 1. What is a recessionary gap? (Be sure to include in your answer a discussion of actual and potential GDP) 2. What is an inflationary gap?  (Be sure to include in your answer a discussion of actual and potential GDP) 10 points   ...
Sketch a graph using instructions below and answer the following questions. Label both axes and all...
Sketch a graph using instructions below and answer the following questions. Label both axes and all curves. Draw LRAS and show a potential equilibrium output as Y*. Draw SRAS. Have your AD1 intersect this SRAS significantly below the potential output. Label AD1-SRAS equilibrium as point A. Have your AD2 intersect the same SRAS slightly above the potential output. Label AD2-SRAS equilibrium as point B. Graph:    Refer to the graph in part a): Suppose the economy is currently at point...
Small Case 2. The country A’s exports to other countries decreased Write the short essay (70-100...
Small Case 2. The country A’s exports to other countries decreased Write the short essay (70-100 words) by answering the below questions: a. What is changing, AD or SRAS? b. Will it increase or decrease? Explain how this change will take place. c. Draw the appropriate change below. d. What happened to Real GDP? e. What phase of the business cycle would the economy be in? f. What is likely happening to unemployment? g. What happened to price level?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT