What is the macroeconomic theory?
Real GDP is nominal GDP adjusted for inflation. Nominal GDP is the sum of the output of a country in a given year. Generally, it is the sum of the consumption spending, investment spending, government spending and exports minus imports. Aggregate demand is influenced by consumer expectations, GDP per person, inflation, etc. It is downward sloping and to the left to reflect the propensity of consumers to consume more as prices are lowered. Aggregate supply is determined by producer expectations, interest rates, money supply, etc. It is upward sloping and to the right to show that as prices increase, suppliers produce more.
Macroeconomics help........?
Real GDP is a better gauge of an economy's output than nominal GDP because real GDP: A. Excludes intermediate goods while nominal GDP does not B. Includes consumption of fixed capital while nominal GDP does not C. Includes interest earnings while nominal GDP does not D. Removes the effect of movements in the exchange rate while nominal GDP does not E. Removes the effects of price changes while nominal GDP does not
Macroeconomics help? Difference between nominal and real GDP?
Economists calculate both nominal GDP and real GDP. Which of the following statements best describes the difference between the two? A. Nominal GDP includes the value of the budget deficit, while real GDP excludes the budget deficit. B. Nominal GDP includes both intermediate and final goods and services, while real GDP includes only final goods and services. C. Nominal GDP measures domestic trade, while real GDP measures international trade. D. Nominal GDP is measured using current dollars, while real GDP is measured using constant dollars. Please help! Even if you don't know the answer, if you can eliminate any choices, that will still be of great help!
Help with Macroeconomics! I don't know y i got these wrong!?
1. C 2.E 3.B 4.D 5.B 6.C 7.E 8.B 9.E 10.B 11. D 12.C 13.C
MACROECONOMICS question!!! Please help?
The quantity theory of money states that (Prices x Output = Nominal money supply x Velocity). Velocity is a measure of how hard money 'works' (the amount of purchases a single dollar facilitates). a) PY=MV 2*10,000=M*5 4,000 = M (the nominal money supply/demand) Real demand for money is defined as (Nominal Demand/Price Level). M/P = 4,000/2 = 2,000 b) i) Y=10,000 (fixed output) M= 5,000 (fixed nominal money supply) V=5 (constant) P=MV/Y P=5,000*5/10,000 P=2.5 (The price level when nominal money supply is held constant at 5,000 is 2.5) ii) M=6,000 P=6,000*5/1,000 P=3 (When the nominal money supply rises to 6,000 the price level increases to 3, ceteris paribus).
Difficulty on a Macroeconomic Problem?
Suppose that the money demand function takes the form (M/P)^d = L(i,Y) = Y/(5i) a. If output grows at rate g, at what rate will the demand for real balances grow (assuming constant nominal interest rates)? b. What is the velocity of money in this economy? c. If inflation and nominal interest rates are constant, at what rate, if any, will velocity grow? d. How will a permanent (once-and-for-all) increase in the level of interest rates affect the level of velocity? How will it affect the subsequent growth rate of velocity? I am just very confused, so if you could offer a description of your rationale, it would really help me understand how to do this type of problem in the future. Thank you.
Economics Question GDP,Nominal GDP,Real GDP and GDP Deflator ?
Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also suppose that in 1984 each bucket of chicken was priced at $10. Finally, assume that in 2004 the price per bucket of chicken was $16 and that 22,000 buckets were produced. a. determine real GDP for 1984 and 2004, in 1984 prices. b. what is the growth rate for nominal GDP? c. what is the growth rate of real GDP ? d. what is the value of the GDP deflator ?
AP Macroeconomics question about aggregate demand?
If the degree of excess capacity decreases at the same time nominal interest rates decrease, in the short run we can expect that aggregate demand will shift left increasing output and employment. shift right increasing output and employment. shift right decreasing output and employment. shift left decreasing output and employment. not change as this is a determinant of aggregate supply
If the price level doubles in a given year, does nominal output double also ?.?
no