Question

Concider how short-run fluctuations affect many things: unemployment, inflation, consumer confidence, spending by firms, government spending...

Concider how short-run fluctuations affect many things: unemployment, inflation, consumer confidence, spending by firms, government spending ect. Use the AS-AD model to illustrate examples of how recession or expansion has a broad influence on society.
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Recession

Under recession economic growth is retarded and there is a slowdown in economic activity

Economic outlook is gloomy and so consumer confidence is shaken. This implies that consumption spending is reduced.

Also business pessimism is increased. This implies that investment spending is also curtailed

Since production is reduced and workers are laid off, unemployment rises.

This increases government spending in the form of transfers and decreases tax collections since incomes are reduced

In this manner, AD is shifted to the left and this reduces both inflation and GDP

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
Use an AD-AS model to depict the following scenarios in the short-run: a. The government cuts...
Use an AD-AS model to depict the following scenarios in the short-run: a. The government cuts taxes b. There is a reduction in government spending c. The rate of inflation increases
Using the AS-AD model, analyze how the following events will affect an economy in the short-run...
Using the AS-AD model, analyze how the following events will affect an economy in the short-run and in the long-run perspective: The government has abolished employees’ health insurance paid by employers; The price of oil has increased; A foreign country’s government has imposed restrictions on the country’s exports; The government has initiated a program of investing in education; The government has increased spending on healthcare
Assume the economy is initially in long-run equilibrium. Explain briefly how short-run stagflation (recession combined high...
Assume the economy is initially in long-run equilibrium. Explain briefly how short-run stagflation (recession combined high inflation) results from an adverse supply shock. (Hint: Use AD-AS diagrams to show what happens to P and Y.) Suppose that stagflation occurs. To help economy go back to its full-employment output, how should the government use her budgetary tool that is based on corporate tax? Briefly explain your answer.
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...
31.   An increase in government spending of $200 million financed by a new tax of $200...
31.   An increase in government spending of $200 million financed by a new tax of $200 million in an economy with a marginal propensity to consume of .90 could result in an increase in nominal GDP (assuming a closed economy with no taxes or leakages) of up to how much? (a) $0; (b) $2,000 million; (c) $180 million; (d) $200 million. 32.   One important consequence of widened income and wealth disparities is a: (a) higher rate of inflation than would...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds...
Assume that consumers view tax preparation services as undifferentiated among producers, and that there are hundreds of companies offering tax preparation in a given market. The current market equilibrium price is $120. Jojo’s Tax Service has a daily, short-run total cost given by TC = 100 + 4Q2. Answer the following questions: How many tax returns should Jojo prepare each day if her goal is to maximize profits? How much will she earn in profit each day? A perfectly competitive...
Juanita is deciding whether to buy a skirt that she wants, as well as where to...
Juanita is deciding whether to buy a skirt that she wants, as well as where to buy it. Three stores carry the same skirt, but it is more convenient for Juanita to get to some stores than others. For example, she can go to her local store, located 15 minutes away from where she works, and pay a marked-up price of $129 for the skirt: Store Travel Time Each Way Price of a Skirt (Minutes) (Dollars per skirt) Local Department...
The questions to answer regarding the case material are as follows: Company overview . How the...
The questions to answer regarding the case material are as follows: Company overview . How the company uses its own products or services to enhance the total compensation for its employees. The internal strengths and weaknesses you identified and how the company responded to these factors from a total rewards perspective. The external opportunities and threats you identified and how the company responded to these factors from a total rewards perspective. Examples of traditional and non-traditional rewards and how they...
Asia’s e-commerce landscape has been booming in recent years. The swift adoption of smartphones and greater...
Asia’s e-commerce landscape has been booming in recent years. The swift adoption of smartphones and greater access to the internet has allowed consumers in the region to be a major force in the global digital economy. The expansion looks set to continue at a rapid pace. According to a November 2018 report by Fitch Solutions, e-commerce sales in the region are forecast to increase by 14.2% this year, with an estimated average annual increase of 14% over the medium term...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT