The problem used two different types of GDP, the nominal GDP and real GDP. Nominal GDP is also called the unadjusted GDP because it is based on the prevailing prices when the output was produced. Real GDP is the adjusted GDP. It is called as such because it is the measure of the market value of all final output that is deflated or inflated to reflect the changes in the price level. In order to know the real GDP, a price index is used to adjust the GDP by dividing the nominal GDP with the price index. When expressed in an equation, it is real GDP = nominal GDP/ GDP price index. The GDP price index is an index number showing how the weighted-average price of a “market basket” of goods changes over time. In our problem, the real GDP and price index were given and we are asked to compute for nominal GDP. For us to compute for the full employment level of nominal (GDP), we need to multiply the given real GDP ($1.2 trillion) by the price index of 115. This will give us the answer of $138 trillion as the full employment level of nominal GDP. For question number 2, aggregate demand and the spending on purchases on goods and services are studied. Aggregate demand is the relationship between the quantity of output demanded and the aggregate price level (Mankiw). It tells us the quantity of good and services people will buy at any given price. An increase in the price level corresponds to a movement up along the unchanged aggregate demand curve.
a) Limits to arbitrage Y b) Investment sentiments Y c) Perfectly elastic curves N d) Inflation illusion Y e) Excessive risk aversion Y Discussion From behavioral economics, there exist three vital effects of noise traders on assets equilibrium prices. To start with, noise creates a situation of risk by the noise trader.
Law and Cases: Partnership Act 1963 and Common law would apply to decide on issues arising in a partnership. Section 6 of the act lays down that a partnership should be for a business to be carried on for profit for the common benefit of all the partners.
There could be a number of reasons for which these resources are left unexploited. First of all, these countries are very poor countries and they lack financial capital. Since they lack financial capital, they cannot exploit the resources. Secondly, it could also be a conscious decision to not exploit these resources due to concerns of sustainability.
Macro-management, of itself, is not the key ingredient in the process; rather, the essential building blocks have been trade liberalization, the opening of the capital account, the floating of the dollar, and the attempts at broad-ranging micro-economic reform, as yet incomplete.
However, the overall impact of retail sales is quite important in a macro economic sense since it shows the government how much people are willing to spend. It also ties in with the idea of consumer confidence about the economy since high retail sales show that consumers are willing to spend more and save less.
The peer has an equal amount of power all other employees of that level, and the subordinates have a lesser degree of power. In terms of potential power, which is power that is available but not applied, employees often see this
In other words, it implies that the product’s secondary value is greater than its primary value. Gestalt law’s defines the way we view objects though it is only descriptive. It offers us a firm foundation for carrying out further research into our ways of thinking,
The fact that the police should have evidence or documented reason to investigate an individual and to hold him or interrogate him is the protection of his constitutional rights and freedom (Samaha, 2011). The police cannot act only on
It does not cover all the all the expenses or long term care. One is advised to buy the medical supplement policy from insurance companies to cater for the extra costs that the Medicare is unable to take care of. A certain percentage of this
2 pages (500 words)Essay
Cite this document
(“Solving 2 Macro-economy Questions Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.net/other/21796-solving
(Solving 2 Macro-Economy Questions Essay Example | Topics and Well Written Essays - 500 Words)
“Solving 2 Macro-Economy Questions Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.net/other/21796-solving.
Cited: 0 times
In answering the first question, we need to define and understand the terms that are related with it. Aggregate supply is a schedule or curve that shows the total quantity of goods and services supplied or produced at different price levels (McConnell and Brue)…