Answer & Explanation:*Instructions: Please review the attached; Read 5 course material and Slide 8-10
prior to answering any questions. Review all files thoroughly and answer each
questions with a minimum of 100-word
count each. Separate your answers by question numbers or letters for an
easier breakdown. Use APA format to include in-text citations and a reference
page. NO OUTSIDE SOURCES, only source
authorized is from the one I provided for you. Here is the reference for the course
material attached: Sexton, R. L. (2013).
Exploring economics (6th ed.). Mason, OH: South-Western, Cengage Learning. NO PLAGIARISM! No cover/title page
required. Let me know if you have any questions or concerns.
1. Compare and contrast the three types of unemployment that
are covered in Slides 8-10. If you were
a policy maker which type of unemployment would be most bothersome to you?
2. What costs are associated with inflation? Explain at least 3 different costs that
individuals or businesses experience when inflation rises.
3. Explain why transfer payments are not included in GDP.
4. Using the components of GDP covered in section 22.1 on
page 633-634 (page 2 & 3 on pdf) of your text, explain which component
would be affected by the following (only
one component should be chosen for each scenario): *no specific word count
but please answer each scenario thoroughly by choosing
one component to each
scenario. Major components of aggregate demand are Consumption (C), Investment
(I), government purchases (G), and net exports (X-M).
a. You buy an Italian
purse.
b. You buy a new
house.
c. New lanes are
added to Interstate 40.
d. You buy groceries.
e. You buy a new
washer and dryer.
5. Suppose the economy is at a macroeconomic equilibrium as is shown on section 22.6 in the course
material. The government decides to give
every taxpayer a $500 tax refund. (Please read section 22.6 on page 650 on
course material (page 19 on pdf) before answering this question).
a. What happens to
the aggregate demand curve after the refund?
b. What happens to
the price level after this change?
c. Is real wealth
increased or decreased as a result of the refund?
6. Review Section 22.7 in your text starting on page 659
(page 28 on pdf). Compare and contrast
the results of the Classical Model and the Keynesian model after an
expansionary policy. Keep in mind that
the economy is in a recession and not at full employment. Address the following:
a. The shape of the
aggregate supply curve in each model in both the long-run and short-run.
b. The effect of an
expansionary policy on aggregate demand in both the long-run and short-run.
c. The effect of an
expansionary policy on the price level in both the long-run and short-run.
read_5.pdf