What happened to real GDP and the inflation rate during the recession of 2007-2009?
What will be an ideal response?
Real GDP fell from 0.2% above potential GDP during the second quarter of 2007 to 7.4% below potential GDP during the third quarter of 2009. The inflation rate rose from 1.8% during the fourth quarter of 2006 to 3.2 % during the third quarter of 2008, before decreasing to ?0.4% during the second quarter of 2009.
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A decline in which of the following types of spending was not generally considered a part of the beginning and continuation of the Great Recession?
A) residential investment spending B) federal government spending C) consumer durables spending D) business investment spending
Suppose firms A and B each make T-shirts. Firm A's production function is q = L0.5K0.5. Firm B's production function is q = 1.2 ? L0.5K0.5
If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.