Explain how the following solution would affect a nation's possibility curve. A prolonged recession increases the number of unemployed workers in the nation
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Explain how the following solution would affect a nation's possibility curve. A prolonged recession increases the number of
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- When the pandemic hit in the beginning of 2020, everything came to a halt. In a single month, 17 million Americans lost their job, and the gross domestic product (GDP), which is how economists measure the total value of a country's products and services, declined by US$2.15tn (£1.55tn). Economists were hopeful that across the world government spending and monetary policy would keep the economy from totally collapsing. During the first wave of lockdowns and stay-at-home orders since December 2019, it was clear that industries that relied on in-person customers - like travel and some retail - were going to struggle, while others would more easily adapt to the "new normal". Tech-heavy companies that delivered products or services to people's homes—like Amazon, Netflix, and Shopify—thrived. To improve the impact of the pandemic, most countries adopted an expansionary monetary policy. The change in the real interest rate influenced the goods market. Aggregate demand changed but there was no…Why do some economists believe that better inventory control software may help to reduce the frequency and severity of recessions? Could differences in technology explain why recessions appear to be more frequent and more severe in poorer countries?According to the classical perspective (the one from the 19th century that I described at the beginning of my first lecture video), what kinds of things could cause recessions or other economic downturns?
- Who is John Maynard Keynes? What time period did he write? What did he believe about the market’s ability to recover from a recession?When an economy dips into a recession, consumers will often be relatively pessimistic about the future for an extended period time. How will this pesimism affect the speed and strength of the recovery?What happens when firms and workers underestimate future prices in the economy. On what would happen to actual output as opposed to the expected potential output.
- Explain a situation where Multiple Equilibria in an economy may occur and provide a suggestion for possible solution.Consider a country whose economic structure matches the assumptions of the classical model. After reading a recent best-seller documenting a growing population of low-income elderly people who were ill prepared for retirement, most residents of this country decide to increase their saving at any given interest rate. Explain whether or how this could affect the following: a. The current equilibrium interest rate b. Current equilibrium real GDP c. Current equilibrium employment d. Current equilibrium investment e. Future equilibrium real GDPBased on the articles “Unemployment Claims Remain Historically High” and “US Consumer Spending Rose More Slowly in July” from the August 27, 2020 and August 28, 2020 issues of the wall Street Journal, respectively, please respond to the following questions: a. What do you think caused the substantial reversal in consumer spending after the dramatic drop during March and April of 2020? Illustrate graphically how would that have affected the consumption schedule. b. What seems to be possible reasons why consumer spending has slowed down in July and August? Are these factors consistent with some of the non-income determinants of consumption discussed in the text? If so, which ones? c. Investment spending also fell dramatically during the second quarter of 2020. What shifters in the investment demand curve seem to be important here? d. Given your answer to part c, explain and illustrate graphically using the investment demand curve diagram why a Federal Reserve policy of lower interest…
- In the 1980s the behavior of the U.S. economy changed. What were the main factors driving that change? How will those factors affect the structure and performance of the Global Economy up to 2040?when hoarding occurs, what problem does it create for an economy? You can use the recent run on grocery stores for food, toilet paper, and cleaning products as an example. Do you feel the government should step in to prevent these types of situations? Why or why not? What types of policies do you think could prevent or help with this type of event? in terms of macro economics.Fill in the blank. ALEX: Hi, Becky. I’m intrigued to see how macroeconomics allows us to explain recent economic events such as the Great Recession that affected so many people. But there’s one thing I don’t understand. Was the collapse of the housing bubble the only cause of the recession, or were there other factors as well? BECKY: Hi, Alex. I agree that macroeconomic theory offers an entirely new perspective on how the economy works. To answer your question, the crash of the housing market was a major factor but not the only cause of the Great Recession. The professor mentioned that the __________ (options: financial, fiscal, government) system deteriorated as well, an event that deepened the economic downturn even further. ALEX: I see. So the bursting of the housing bubble caused the initial decline in aggregate demand. Then the financial crisis caused aggregate demand to decline even more. Could you also help me understand how to use the aggregate demand and aggregate supply model…