(02.03 MC) Which of the following individuals is considered “cyclically” unemployed by economists?

(02.07 MC) Use the graph to answer the question that follows.Which point on the business cycle represents a negative output gap in the economy?

(01.05 HC)Use the graph to answer the question that follows.Public DomainThe graph illustrates a change in the market for bicycles. Which statement could explain the graph?

  (04.07 MC) Use the graph to answer the question that follows. The graph shows a change in an economy after the government’s decision to provide tax benefits to businesses in an effort to increase investment. What is the new point of equilibrium in the economy’s loanable funds market?

(02.07 MC) A country’s unemployment rate is extraordinarily low and inflation is beginning to rise sharply. Its real GDP growth is still positive but has started to slow down. Which point of the business cycle best describes this economy?

(03.01–03.09 HC) For all graphs, be sure to correctly and completely label all axes and curves and use arrows to indicate the direction of any shifts.The United States is currently experiencing an inflationary gap. Draw a correctly labeled graph of the aggregate demand, long-run aggregate supply, and short-run aggregate supply curves. Label the equilibrium price level PL1 and the equilibrium real output Y1. Label the full-employment level of output YF. What can be assumed about the actual rate of unemployment compared to the natural rate of unemployment, based on the information above? Explain. Assume that the output gap is estimated to be $800 billion and the federal government decides to take action. If the marginal propensity to consume is 0.8, by how much would it need to change government spending to close the gap? Show your work and indicate whether the change would be a spending increase or decrease. An alternative bill in Congress proposes to use the income tax to close the output gap rather than changes in spending. Calculate the change in tax revenue the government would need to close the gap. Assume the same figures as part (c). What is one possible automatic stabilizer in the economy that would contribute to closing this output gap? Assume that instead of intervening, the government allowed the economy to self-adjust in the long run. On your graph from part (a), illustrate how the economy would self-adjust in the long run. If the GDP deflator is 140 in the year that the inflationary gap is identified, and three years later it is 140, does this mean that there has been inflation over the three years? Explain. After the long-run adjustment in part (f), is the economy operating on, inside, or outside of its production possibilities curve?

(04.01–04.07 HC) For all graphs, be sure to correctly and completely label all axes and curves and use arrows to indicate the direction of any shifts.Assume that an economy is in a short-run macroeconomic equilibrium and experiences a negative demand shock. What will happen to real output and the price level as a result? Explain. Using a correctly labeled graph of the money market, illustrate the impact of the negative demand shock. What will happen to the price of previously issued bonds? Explain. What is one policy action that the central bank could take to offset the change in the nominal interest rate from part (b)? Assume a limited reserves system. Assume that the required reserve ratio is 5 percent. If the central bank wants to increase the money supply by $80 billion, what is the specific open-market operation (type and minimum value) that the central bank needs to conduct?

(02.07 MC) In which year did the economy above most likely have an actual unemployment rate equal to the sum of its frictional and structural unemployment rate?

(02.06 MC) If the real GDP and nominal GDP are $200 billion and $620 billion respectively, what is the value of the GDP deflator?

(02.06 MC) Use the data table to answer the question that follows. Year Nominal GDP GDP Deflator 1 $640 billion 160 2 $1050 billion 175 By how much did the value of output, adjusted for inflation, change from Year 1 to Year 2?