Homework: ASSESS Chapter Score: 0 of 1 pt Chapter Problem 5 Suppose that the U.S

Question

Homework: ASSESS Chapter Score: 0 of 1 pt Chapter Problem 5 Suppose that the U.S. economy has a recessionary ap and the world e run. U.S. potential GDP is $16.0 trillion. Draw a line to indicate potential GDP. Label it The U.S. economy has a recessionary gap. Draw the aggregate demand curve. Label it AD1- Draw the aggregate supply curve. Label it AS1 Draw a point at the macroeconomic equilibrium. Label it 1. ts The world economy goes into an expansion. Draw a curve to show the effect of the world expansion on the U.S. econc Draw a point at the new macroeconomic equilibrium. Label it 2. In the short run, the global expansion O A. decreases U.S. unemployment ? B. has no effect on U.S. unemployment O C. increases U.S. unemployment

Explanation / Answer

As the equilibrium moves closer to the potential GDP, the unemployment level decreases

Cyclical unemployment is associated with the difference of the GDP level from the potential GDP. Unemployment is higher, depending on the distance between the equilibrium point giving the real GDP value, and, the potential GDP

a) decreases US unemployment

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