7. Suppose the government pays everyone who lost his/her job during the current crisis 5000$. How...

7. Suppose the government pays everyone who lost his/her job during the current

crisis 5000$. How does the graph below change? How does the GDP change?

Explain.

Expert Solution

ANSWER:-

Suppose the government pays everyone who lost his/her job during the current crisis 5000$.the GDP change.

It is accepted that individuals has lost their because of some pandemic.
THe circumstance of individuals loosing their employments(job) discloses to us that there is decrese sought after of work. The factor which may have caused the diminished work request is decrease in financial movement and less creation.
The decreased creation will prompt diminished salary, i.e., decreased GDP of economy and hamper economic development.
Due to the leftward development of interest curve and no adjustment in supply of work, there would be abundance supply of labour.It would move the harmony point at lower level henceforth reduncing the lowest pay permitted by law level.
In such a circumstance, the economic apparatus may fall towards downturn, in this way the government should expand open spending so that there would be course of funds in economy and more up to date business oportunities would be made.

PLEASE UPVOTE.

Rahul Sunny answered 6 months ago

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