Question

In: Economics

8. Recessions in China, South Korea, Thailand, and Japan would cause A) the U.S. price level...

8. Recessions in China, South Korea, Thailand, and Japan would cause

A) the U.S. price level and real GDP to fall.

B) the U.S. price level and real GDP to rise.

C) the U.S. price level to rise and real GDP to fall.

D) the U.S. price level to fall and real GDP to rise.

9. Which of the following is an example of a negative demand shock?

A) an increase in the money supply.

B) a stock market boom held by household.

C) the European debt crisis.

D) an increase in nominal wages.

             

13. Which of the following statements is true?

A) A demand shock is a sudden event that increases demand for goods or services temporarily.

B) A recessionary gap associated with a business-cycle contraction. A recessionary gap may also be identified as a contractionary gap.
C) An inflationary gap occurs when potential output exceeds actual output.

D) The European debt crisis is an example of a negative supply shock.

14. Stagflation may result from:

A) an increase in the supply of money or an increase in government spending.

B) a decrease in income taxes or a decrease in foreign income.

C) a stock market crash held by households or an increase in prices of houses.

D) an increase in nominal wages or a decrease in labor productivity.

Solutions

Expert Solution

Answer
8.C) the U.S. price level to rise and real GDP to fall.
A recession in countires from US mainly imports will cause recession in USA, as many MNC have businesses spead in all these countries. The recession will also affect uS, as they will not be in a position to invest as much as before, and also exports from these countries will fall, which will affect US output.

9.C) the European debt crisis.
It is a situation when there is a suddend decrease in demand.The European Debt crisis is an example of it

13.B) A recessionary gap associated with a business-cycle contraction. A recessionary gap may also be identified as a contractionary gap.
In a recessionary gap, the country's real GDP is below the poetenial GDp at full output

14.B) a decrease in income taxes or a decrease in foreign income.
Stagflation usually occurs due to a suddend decrease in supply. When governments dont recieve enough reciepts, this also decreaed expenditure, falling into a viscious cycle.

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Rahul Sunny answered 8 months ago
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