Need help with the following questions; Thank you for your time and consideration!
1. A new manufacturing process is introduced that is more efficient and lowers the cost of producing Hand Sanitizers. At the same time, the economy is suffering from a severe rescission and household income is decreasing. As a result,
A) Demand will (increase, decrease, indeterminate)
B) Supply will (increase, decrease, indeterminate)
C) Equilibrium price will (increase, decrease, indeterminate)
D) Equilibrium Q will (Increase, decrease, indeterminate)
2. Using the table bellow calculate the missing values:
Year nominal GDP Real GDP
1(2007) 4586 ?
2(2008) 5145 5630
3(2009) 5800 ?
4(2010) 6581 6093
5(2011) ? 6852
Enter the missing values : the inflation/growth rates as indicated below.
inflation rate year 1-2: ____
Real growth rate yr. 2-3: ____
inflation rate year 3-4: ____
Real growth rate yr. 4-5: ____
3. Use the information below for a four sector economy, answer the following questions:
C=50+0.7Y. I=55 G=100. X=90. IM=20+0.15Y. Yf=800 (full employment)
A) what is the value of autonomous expenditures
b)what is the slope of aggregate expenditure?
c) what is the value of equilibrium GDP?
d)What is the value of Consumption (C) at equilibrium?
e)What is the size of the output gap
f) What is the type of the output gap- Recessionary or Inflationary
If the Investment increases by 10:
G) what is the slope of aggregate expenditure (AE)?
H)What is the value of autonomous expenditure (AE)?
I)WHat is the value of equilibrium GDP?
Thank you for your time and consideration