Shocks occur when actual events do not match expectations. Harry's Pepperoni Pizza Parlor produced 10,000 large pepperoni pizzas last year that sold for $10 each. Which of the following statements is true? This would suggest that airline ticket prices are: Increasing investment in the present means forgoing future consumption. Which of the following events would most likely result in higher unemployment? sell the additional scratching posts out of its inventory and rebuild the inventory later when a negative demand shock occurs.
Which of the following is most likely to indicate higher unemployment? Which of the following groups is the principal source of savings in an economy?
The major statistics that provide macroeconomists a picture of the health of an economy include the following, except. Real GDP will decrease, inflation will increase, and unemployment will increase, The period when output and living standards decline is referred to as.
How will the firm respond to a positive demand shock if prices are inflexible?
Firms can maintain production levels and adjust inventories in response to demand shocks.
Proper inventory management is a key part of helping retail and manufacturing businesses operate efficiently. Refer to the graphs. True or False.
a huge negative demand shock in the economy.
If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP?
promote economic growth by helping to direct household saving to businesses that want to invest. Prices tend to be sticky in the short run but become more flexible over time. Workers' wages may be rising faster than the overall price level. Prices tend to be stickier in the shorter run than in the longer run. Firms can maintain production levels and adjust inventories in response to demand shocks. Any person without a job is considered to be unemployed. Firms' inventories will increase, causing them to cut production. The amount of investment is ultimately limited by the amount of, If prices of goods and services were free to quickly adjust, then, A negative demand shock would have no short-run effect on unemployment, Refer to the figure. Economists and policymakers are generally more concerned about nominal GDP than real GDP.
In situations of sticky prices and negative demand shocks, we would expect firms to: build up inventories instead of reducing production.
If an economy has sticky prices and demand unexpectedly increases, you would expect the economy's real GDP to: firms are worried that frequent price changes would annoy consumers.
Which of the following statements is most accurate about advanced economies?
Suppose that an economy's output does not change from one year to the next, but the price level doubles.
Which of the following is an example of economic investment?
Nominal GDP measures a nation's output in current year prices. differs over time as prices become increasingly flexible in the months and years following a shock. Refer to the figure. Consumers become worried about job loss and buy fewer goods and services than expected.
Real GDP is preferred to nominal GDP as a measure of economic performance because: nominal GDP uses current prices and thus may over- or understate true changes in output.
If a family's income increases by 5 percent at the same time that inflation is 3.5 percent, then the, Family will need to spend more in order to maintain its standard of living, Decisions about saving and investment are, Complicated by the fact that the future is uncertain, The Great Recession of 2007-09 illustrated the situation where a negative demand shock occurred and, the economy's overall price level was "sticky.". Refer to the figures. Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices? The two topics of primary concern in macroeconomics are: short-run fluctuations in output and employment and long-run economic growth.
prices are sticky, but output is flexible. Which of the following results from firms holding inventories? An increase in __________ GDP guarantees that more goods and services are being produced by an economy. refer to unexpected changes in the desires of households and businesses to buy goods and services. Which of the following statements best describes how firms respond to demand shocks under conditions of inflexible prices? If prices are inflexible, then a negative demand shock will lead to, unexpected changes in the demand for goods and services, Because prices are sticky, a positive demand shock will lead to, prices are sticky in the short run, but flexible over time, will increase if there is an increase in the level of output.
The amount of investment in an economy is ultimately limited by the amount of savings in that economy. Suppose that prices are sticky in the short-run. Firms can maintain production levels and adjust inventories in response to demand shocks.
For which of the following goods is the price least likely to be flexible? Nike buys new machines that increase shoe production. Which of the following statements best describes price flexibility in the economy?
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