If the nominal GDP is $559 billion in the base year, and it rises to 577 in year 1, and 605 in year 2, what is the real GDP in each year, given that
September 3, 2020
Discussion questions below. 150 words minimum with references.The long-run growth is measured as the increase in real GDP per capita and this measure has changed over time and it also varies across c
September 3, 2020

    3.  i) Consider an economy that is operating at full employment equilibrium.  Graphically   illustrate the effect of an increase in government spending (G) on the price level and the level of GDP in the short run.

ii) Explain with the aid of an AD-SAS-LAS diagram, how long run adjustments will take place in this economy as a result of the event in i) above?

4.    i) Explain how banks create deposits by making advances.

ii) Describe the factors that limit how much credit and deposits the banks are able to create.

3 i) ii) 4 i)Individual banks are not allowed to print their own money. But, banks may create money by creatingcheckable deposits, which are a part of the money supply. Suppose the Fed prints…

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