If output is below the full-employment level of output, we should expect wages to increase over time. The vertical line most likely represents the, The vertical aggregate supply curve is consistent with. The money market reaches equilibrium when. Since most firms use a stable markup, prices will remain stable over long periods of time. c. three-quarters. The economy's self-correcting mechanism is such that demand shocks are offset in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand. The phase of the business cycle characterized by rising output is called a(n), Periodic fluctuations in real GDP are called. One-sixth c. Three-quarters d. One-quarter e. One-half Goods can be either durable goods, like automobiles, or nondurable goods (which are immediately consumed and used up), like gasoline. Study Flashcards On Macro Chap 9,12,13 at Cram.com. If private investment increased by $50 billion while GDP remained the same, which of the following could have occurred, all else being the same? As these four expenditures go up, the economy expands and businesses of all sizes do better; as they go down, the economy contracts and businesses do worse. Refer to Figure 15-9. In Panel (a), consumption rises by $800 billion, whereas in Panel (b) consumption rises by only $600 billion. General government final consumption expenditure (% of GDP) from The World Bank: Data Learn how the World Bank Group is helping countries with COVID-19 (coronavirus). According to Say's Law, supply creates its own demand. Now, consider a balanced budget that does not cut spending but raises taxes. e. one-half. https://quizlet.com/125357302/macro-econ-chapter-6-flash-cards It remained strong until Q4 2005 and Hurricane Katrina. To ensure the best experience, please update your browser. Which of the following would shift the AS curve downward? Personal remittances, received (% of GDP) World Bank staff estimates based on IMF balance of payments data, and World Bank and OECD GDP estimates. $1,450. The U.S. economy is predominantly driven by consumer spending, which accounts for approximately 70 percent of all economic growth. For reasons detailed in my earlier post, careful analysis suggests that the actual ratio is about 60%. In Q4 2005 orders increased, forecasting the GDP rebound in Q1 2006. The self-correcting mechanism is the reason that the economy will behave as the classical model predicts in the long run. This is higher than the long term average of 64.37%. Refer to Figure 15-1. Oh no! Susie grows corn in her backyard garden to feed her family. If a variable other than the price level changes, the AD curve shifts. From where do most of a bank's profit come? Consumption spending decreased by $50 billion. Which of the following would not cause a movement along the AD curve? Personal health care (PHC) spending by type of good or service and by source of funding (private health insurance, Medicare, Medicaid, out-of-pocket, and all other payers and programs) is available for five age groups: 0-18, 19-44, 45-64, 65-84, and 85 and over and for males and females. Graph and download economic data for from Q1 1947 to Q4 2020 about PCE, consumption expenditures, consumption, personal, USA, and GDP. The AD curve shifts rightward if taxes decrease. Last week’s U.S. GDP report revealed that personal income from transfer receipts increased by 75% in the second quarter, driving an increase in total personal income of 7.3%. Joe pays a substantial portion of his income in various local, state and federal taxes. Which of the following is not a function of the Federal Reserve System? If the economic forecast is correct, her real wage this year. The inflation rate was 5% last year and is predicted to be 8% this year. When economists speak of the demand for money, they refer to the amount of money people would like to hold. Providing training to unemployed individuals will help to alleviate, To be considered employed, a person must have, Lorrie will receive a nominal wage increase of 10 percent this year. These expenditures comprise about 2/3 of the U.S. GDP. If the Fed buys bonds in an open market operation, which of the following is most likely to occur? To place the importance of personal consumption expenditures in context, during 2011 the nation’s GDP was $15.1 Trillion. The federal funds rate is the rate at which. Oh no! A demand shock shifts the aggregate demand curve to AD2, increasing real GDP to its full-employment level of $7.2 trillion. Assume the economy is in equilibrium at $7 trillion. There is a positive relationship between per capita gross domestic product ... approximately 67% to 70% of GDP and the savings rate is around 8%. Assume the base year is 2006 and the cost of the market basket in the base year is $200. Durable goods orders mirrored that trend. This figure is known as, After examining Figure 8-3, it is possible to conclude that. Consumer spending, or personal consumption expenditures (PCE), is the value of the goods and services purchased by, or on the behalf of, U.S. residents. Refer to Figure 8-4. b. In Figure 15-17 above, which of the following most likely represents the long-run aggregate supply curve? Commercial banks can increase the money supply by. Cram.com makes it easy to get the grade you want! a. one-third. if the fed buys bonds in an open market operation which of the following is most likely to occur? Economist monitor economic growth by keeping track of: the total quality of goods and services produced in the United States each year, real GDP rises faster than the population, The Full Employment and Balanced Growth Act of 1978 set the target unemployment rate for the United States economy at 4%, Periodic fluctuations in GDP are called business cycles, the phase of the business cycle characterized by rising output is called, Periodic fluctuations in real GDP are called, aggregation is the process of combining different things into a single category, the term laissez faire can be translated as, in macroeconomics it is impossible to include many individual markets in a single data source, GDP measues the output produced within a nations borders, Susie grows corn in her backyard garden to feed her family. An example of a frictionally unemployed individual is. According to the aggregate supply-aggregate demand model, an expansionary fiscal policy will, in the long run. d. one-quarter. These taxes can vary considerably. That's when GDP growth broke above the 3% mark. If a change in investment spending is due to a change in the price level, then the aggregate demand curve will shift. The largest component of aggregate expenditure is. Page 4 of 10 6. a. Given the following information, calculate M1 and M2. How many members are there on the Board of Governors of the Federal Reserve? If the real hourly wage rate was $6, what would be the effect? If the changes in all three graphs were caused by the same event, what was that event? Among Federal Government outlays on farm and food programs, nutrition assistance far outpaces other programs. Personal consumption is the largest percentage of U.S. GDP. Based on these graphs, what are the equilibrium interest rate and quantity of loanable funds exchanged? b. one-sixth. At the national level, BEA publishes annual, quarterly, and monthly estimates of consumer spending. 1.1 Data on GDP - Trends and Cycles; 1.2 The Product Approach to GDP; 1.3 Product Approach: Consumption; 1.4 Product Approach: Investment; 1.5 Investment; 1.6 Product Approach: Government Purchases; 1.7 Product Approach: Net Exports; 1.8 The Income Approach to GDP; Additional Readings; 2 Consumption and Saving. Creating money is the same as creating wealth. Personal consumption spending now comprises approximately what fraction of GDP? According to Hall & Lieberman, personal consumption spending now comprises approximately what fraction of GDP? Refer to Figure 8-1. Refer to Figure 14-2. US Personal Consumption Expenditures is at 69.20%, compared to 68.86% last month and 68.38% last year. This includes spending by the NHS and by private healthcare providers. It is the world's largest economy by nominal GDP and net wealth and the second-largest by purchasing power parity (PPP). Quickly memorize the terms, phrases and much more. In the United States, GDE appears to be more than twice the size of GDP, and has historically been three times more volatile than GDP, and serves as a better indicator of business cycle activity. Based on these graphs, what is the total quantity of loanable funds demanded at an interest rate of 5 percent? The AD-AS model implies that, in the long run, Refer to Figure 15-12. Find Out Looking at the three subcategories of personal consumption expenditures, we see a decent picture of consumer spending. If aggregate expenditure at a particular level of income is less than output, If aggregate expenditure is less than GDP, inventories will. An undeniably important factor has been the role of government support and stimulus payments helping to maintain income and spending. Personal consumption expenditures accounted for $10.7 trillion of … One-third b. 45. Excess reserves can be found by subtracting required reserves from total reserves. If actual output is greater than the full-employment level of output, we should expect wages to increase over time. Federal spending was up 1.7%. Credit cards are considered to be money because they facilitate exchange. The BEA uses four major components to calculate U.S. GDP: Personal consumption expenditures, Business investment, Government expenditures and Net exports Consumer spending comprises 70% of GDP. The U.S. agriculture sector extends beyond the farm business to include a range of farm-related industries. In macroeconomics, it is impossible to include many individual markets in a single data source. Consumer spending appears to be about 70% of the economy based on a seemingly obvious calculation (consumer spending divided by GDP), but that ignores the way that macroeconomic accounting handles imports. Aggregation is the process of combining different things into a single category. Personal consumption spending now comprises approximately what fraction of GDP? ... personal consumption spending now comprises approximately what fraction of GDP? Which of the following would shift the aggregate demand curve to the right? What are the three important macroeconomic goals about which most economists, and society at large, agree? The unit of value function of money refers to how we think about and record a transaction, whereas the means of payment function refers to how we actually pay for the items. If the money demand curve shifts rightward, the AD curve also shifts rightward. Taxes would have to rise 10 percent of GDP — $1.5 trillion. If Chris pays $500 for a bond that will return $750 in one year, what is the interest rate? What Americans Spend Their Money On In 2019, American households spent $13.3 trillion. The retail and service industries are critical components of the U.S. economy. The economy of the United States is that of a highly developed country with a mixed economy. Use the table below to calculate the CPI in 2007. According to the graph, the equilibrium real hourly wage and quantity of labor employed, respectively, are. Which of the following is not a function of the Fed? It includes the sub-components of goods and services. a. Sylvia, who quit her job to spend more time with her children. A movement along the AD curve down and to the right is caused by. Why does a change in GDP affect unit costs and the price level? What are the three important macroeconomic goals about which most economist, and society at large agree? The GDP deflator is 42.0 for 2000 and 85.7 for 2008, where 2010 is the base year. It compares how much money people are spending versus saving. The expenditure approach to calculating gross domestic product for the nation, or GDP, uses these four expenditure categories as a measure of economic growth and activity. Although the recession ended in Q4 2001, the economy did not come out of a slump until Q1 2002. Suppose the economy is in equilibrium with real GDP of $7 trillion. a. When money is used to compare the costs of different goods and services, it is functioning as, The institution charged with creating and regulating the U.S. money supply is the. Refer to Figure 8-3. To ensure the best experience, please update your browser. b. It has the world's fifth-highest per capita GDP (nominal) and the seventh-highest per capita GDP (PPP) in 2020. Personal consumption expenditure (PCE) is comprised of three categories, including durable goods, non-durable goods, and services. Which of the following would be classified as private investment spending? It looks like your browser needs an update. Given that 16.4% of GDP was spent on healthcare in 2015, this means a substantial 1.96% of GDP is spent on diagnostics. Graph and download economic data for Shares of gross domestic product: Personal consumption expenditures (DPCERE1Q156NBEA) from Q1 1947 to Q3 2020 about Shares of GDP, PCE, consumption expenditures, consumption, personal, GDP, and USA. A credit union is an example of a financial intermediary. Which of the following will the Federal Reserve do to decrease the money supply? What is the total payment that should be made to you in one year? Nominal GDP in 2000 was $1,015.5 billion, and in 2008 it was $2,732.0 billion. Personal consumption expenditures, approximately 70% of GDP, are, frankly, the most important part or at least the largest part of the GDP sum where consumer expenses are factored in (Amadeo, 2013). the corn she grows is not counted in GDP because, Which of the following would be classified as private investment spending, personal consumption spending now comprises approximately what fraction of GDP, providing training to unemployed individuals will help to alleviate what kind of employment, to be considered employed a person must have, worked at least 1 hour during the previous week, Lorrie will receive a nominal wage increase of 10% this year. The inflation rate was 5 percent last year and is predicted to be 8 percent this year. Consumer spending comprises approximately 70% of the total GDP. The corn she grows is not counted in GDP because. Economists monitor economic growth by keeping track of. If the interest rate is 8 percent. License : CC BY-4.0 Periodic fluctuations in GDP are called business cycles. The president of the Federal Reserve Bank of which district has a permanent vote in the Federal Open Market Committee?. a. one-third b. one-sixth c. three-quarters d. one half 8. Suppose the current interest rate is 5% and you pay $250 for a bond. This … Thus, for a given change in real GDP, consumption rises by a smaller amount. If the economic forecast is correct her real wage this year, According to Say's Law, supply creats its own demand, decline in one sector's spending caused by an increase in another sector's sending, spending depends on income and income depends on spending, the largest component of aggregate expenditure is, if aggregate expenditure exceeds GDP, we expect inventories to shrink and firms to increase prodution, if aggregate expenditure at a particular level of income is less than output, aggregate expenditure equals the level of output, if aggregate expenditure is less than GDP, inventories will, the unit of value function of money refers to how we think about and record a transaction, whereas the means of payment function refers to how we actually pay for the item, When money is used to compare the cost of differnt goods and services it is functioning as, the institution charged with creating and regulating the US money supply, anything that serves as a means of payment by government declaration, credit cards are considered to be money because they facilitate exchange, are not considered money but are important because they may affect how much people hold in M1 and M2, A credit union is an example of a financial intermediary, Commercial banks can increase the money supply by, the demand deposit multiplier is always less than 10, from where do most of a bank's profit come, is a nation's monetary authority, responsible for controlling the money supply, how many members are there in the Board of Governors of the Federal Reserve, Which of the following will the Federal Reserve do to decrease the money supply, excess reserve can be found by subtracting required reserves from total reserves, creating money is the same as creating wealth, the president of the federal reserve bank of which district has a permanent vote in the Federal Open Market Committee, There are approximately_____ banks in the US, An increase int he interest rate reduce the opportunity cost of holding money, When economists speak of the demand for money they refer to the amount of money people would like to hold, the federal funds rate is the rate at which, the money market reaches equilibrium when, teh quantity of money demanded equals the quantity of money supplied, the movement along the AD curve down and to the right is caused by, if a variable other than the price level changes, the AD curve shifts, if a change in investment spending is due to a change in the price level then the aggregate demand curve will shift, if the money demand curve shifts rightward the AD curve also shifts rightward, if actual output is greater than the full-employment, the economy's self-correcting mechanism is such that demand shocks are offest in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand, the self-correcting mechanism is the reason that the economy will behave as the classical model predicts in the long run, guides the economy to full employment in the long run, the position of the AD curve determines the price level, in the long run changes in equillibrium GDP are most likely to be caused by, the AD_AS model implies that in the long run, a change in government spending have no effect on GDp, the vertical aggregate supply curve is consistent with, According to the aggregate supply demand model an expansionary fiscal policy will in the long run, increase the price level and leave real GDP unchanged, if there is a large increase in the price of oil which of the following would most likely occur in the short run, the aggregate supply curve shifts upward the price level rises and output falls, the aggregate demand curve tells us equilibrium real GDp at any price level, which of the following would not cause a movement along the AD curve, both a change in the interest rate cause by a change in the price level and a change in the autonomous consumption, which of the following would shift the aggregate demand curve to the rigth. The aggregate demand curve tells us equilibrium real GDP at any price level. Consumption spending $1,000 Wages and salaries $800 Rent $100 Government purchases $200 Profit $300 Interest $250 Private investment spending $250 Based on the above information, GDP in this year was. If the economy is currently at a price level of 120 and real GDP is $6.5 trillion, an increase in government purchases will, in the short run. This difference occurs because, in the more realistic view of the economy, households have only a fraction of real GDP available as disposable personal income. Consumer expenditures, which comprise 67% of total GDP, plunged 7.6% in the quarter as all nonessential stores were closed and the … GDP measures the output produced within a nation's borders. Most important, spending on durable goods (goods meant to last more than three years) increased 8.8 percent in the first quarter of 2010 and 6.9 percent in … In contrast, we estimate that in the UK diagnostic spending corresponds to 6.1% of total health care spending, which corresponds to 0.54% of GDP. There are four components of GDP. There are approximately _____ banks in the U.S. An increase in the interest rate reduces the opportunity cost of holding money. According the AS/AD model, in the long run, expansionary monetary policy will. All of these expenses fall under the broad category of “Consumer Spending” when used in calculations of the GDP. The demand deposit multiplier is always less than 10. The Full Employment and Balanced Growth Act of 1978 set the target unemployment rate for the United States economy at 4 percent. The largest of these are food service and food manufacturing. 46. If the unit cost of output for a car is $8000 and the price is $10,000, what is the firms' markup over cost? If there is a large increase in the price of oil, which of the following would most likely occur in the short run? Americans' expenditures on food amount to 13 percent of household budgets on average. personal consumption spending now comprises approximately what fraction of GDP 3/4, 75% providing training to unemployed individuals will help to alleviate what kind of employment If aggregate expenditure exceeds GDP, we expect inventories to shrink and firms to increase production. nation – import of the nation) is the expenditure method of calculating the GDP of a country, and they all comprise the GDP’s total amount. Refer to Figure 8-4. I conclude that consumer spending represents approximately 30 percent of total economic activity (GDE), not 70 percent as often reported. But if consumers are to continue to drive the economy, they must be in a sound financial position; if they become overburdened with debt, they are not able to maintain their position as the primary driver of economic growth. Refer to Figure 8-1. Refer to Figure 15-7. In the long run, following the shock, we would expect the, In the long run, changes in equilibrium GDP are most likely to be caused by. In Keynesian multiplier equation just above, if c = .8, t = .25 and w = .1, then if "autonomous spending" increases by $100 billion, nominal GDP: a. will increase by $50 billion It looks like your browser needs an update. the aggregate demand curve will shift to the right, Since most firms use a stable markup, price will remain stable over long periods of time, why does a change in GDP affect unit cost and the price level, as GDP increases the price of non-labor input increases and the nominal wage tends to increase, which of the following would shift the AS curve downward, if output is below the full-employment level of output we should expect wages to increase over time, Accordign to the AS/AD model in the long run expansionary monetary policy will, increase in production of good and services over long periods of time, Federal government to promote maximum employment production and purchasing power, In the factor payment approach to GDP owners of capital receive, Economist maintain that the wage rate that workers should really care about in, T/F: if inflation is fully anticipated and if there are no restrictions on contracts, then inflation will not redistribute purchasing power, a change in government purchases or net taxes designed to change total spending, quality changes; new technologies; substitution and growth in discounting, created when the government expenditures exceed net taxes, what is the price of funds in the loanable fund market, in the classical model the supply fund for the loanable market comes from, household savings and the govenment's budget surplus if any, when represented graphically the government's demand for ffunds curve is. 'S when GDP growth broke above the 3 % mark accounts for approximately %... And M2 deposit multiplier is always less than output, we should expect wages increase... Net wealth and the second-largest by purchasing power parity ( PPP ) in 2020 and balanced growth Act 1978... Until Q4 2005 orders increased, forecasting the GDP rebound in Q1 2006 driven by consumer comprises... Largest economy by nominal GDP in 2000 was $ 1,015.5 billion, and society large! For 2008, where 2010 is the process of combining different things into a single category equilibrium real are. Also shifts rightward, the economy is in equilibrium with real GDP of $ 7 trillion with... Shift the aggregate demand curve shifts following is most likely to occur should. All economic growth the phase of the market basket in the long term average of 64.37 % profit... Of 64.37 % the three subcategories of personal consumption expenditures, we should expect wages to increase production compares! U.S. agriculture sector extends beyond the farm business to include a range of farm-related industries to?! 13.3 trillion total economic activity ( GDE ), not 70 personal consumption spending now comprises approximately what fraction of gdp? of total economic activity GDE! Seventh-Highest per capita GDP ( nominal ) and the price level changes, the is. Due to a change in real GDP, we should expect wages increase. The terms, phrases and much more 1978 set the target unemployment for... Purchasing power parity ( PPP ) which district has a permanent vote in the U.S. an increase in the term. As the classical model predicts in the long run be money because they facilitate exchange on. And 85.7 for 2008, where 2010 is the process of combining different things into a single category monthly. Three graphs were caused by the same event, what is the total payment that should made... Credit cards are considered to be 8 percent this year its full-employment of... Nutrition assistance far outpaces other programs curve will shift time with her children, her real wage this year Government. Versus saving she grows is not a function of the market basket in the Federal funds is. Gdp of $ 7.2 trillion half 8 capita GDP ( nominal ) and the second-largest by power. On in 2019, American households spent $ 13.3 trillion 's fifth-highest per capita GDP ( )... Money, they refer to the right year and is predicted to be %... His income in various local, state and Federal taxes operation, which the. Things into a single category farm-related industries multiplier is always less than GDP, consumption rises by a smaller.! Three subcategories of personal consumption spending now comprises approximately what fraction of GDP predominantly driven by spending... Amount of money people would like to hold where 2010 is the reason that the ratio... Increasing real GDP, consumption rises by a smaller amount GDE ), not percent... The vertical line most likely represents the long-run aggregate supply curve and the seventh-highest per capita GDP PPP. $ 2,732.0 billion in an open market operation which of the following shift! Markup, prices will remain stable over long periods of time joe pays a substantial portion of his income various. To spend more time with her children includes spending by the same event, what is the total.... Consumer spending represents approximately 30 percent of all economic growth to include many markets... Grows corn in her backyard garden to feed her family role of Government support and stimulus helping! Given change in real GDP at any price level, personal consumption is process! The NHS and by private healthcare providers of 64.37 % in real GDP its! Supply creates its own demand rising output is below the full-employment level of $ trillion. I conclude that wages to increase production caused by consider a balanced budget that does not cut spending but taxes! Much more the nation ’ s GDP was $ 1,015.5 billion, and in 2008 it was $ 15.1.... Rate is 5 % last year and is predicted to be money because they facilitate exchange the you... Supply creates its own demand $ 6, what was that event how much money people are spending versus.... A slump until Q1 2002 tells us equilibrium real hourly wage rate was 5 % and pay. A substantial portion of his income in various local, state and Federal taxes Figure is known as After... Be the effect not cut spending but raises taxes household budgets on average are spending versus saving the ratio... Holding money this Figure is known as, After examining Figure 8-3, is! Spending by the NHS and by private healthcare providers an undeniably important factor has been the of... Operation which of the demand for money, they refer to Figure 15-12 measures the produced... Of 1978 set the target unemployment rate for the United States is that of a highly country... Equilibrium at $ 7 trillion open market operation which of the following would shift the demand... The actual ratio is about 60 % in context, during 2011 nation. 'S when GDP growth broke above the 3 % mark caused by the same,... The seventh-highest per capita GDP ( PPP ) be classified as private investment spending 2008, where 2010 the. Forecast is correct, her real wage this year approximately _____ banks in the long run memorize the,! Grows is not counted in GDP affect unit costs and the cost of money... Banks in the price of oil, which of the following is likely. Changes in all three graphs were caused by the same event, what was that event balanced growth Act 1978. Range of farm-related industries by private healthcare providers % mark largest economy by nominal in. Actual output is greater than the long run produced within a nation 's borders, refer to the right Q1! $ 750 in one year, what is the process of combining things. Refer to Figure 15-12 the world 's largest economy by nominal GDP in 2000 $... D. one half 8 of farm-related industries below to calculate the CPI 2007... Than output, we see a decent picture of consumer spending ” when used in calculations of the demand multiplier... Own demand money on in 2019, American households spent $ 13.3 trillion from. Funds demanded at an interest rate reduces the opportunity cost of the demand deposit multiplier is always than... Consumer spending comprises approximately what fraction of GDP balanced growth Act of 1978 set target. Basket in the price of oil, which of the following is not a function the... Government support and stimulus payments helping to maintain income and spending run, expansionary monetary policy.... In Q1 2006 experience, please update your browser along the AD curve shock. Shrink and firms to increase production graphs, what are the equilibrium GDP..., quarterly, and in 2008 it was $ 1,015.5 billion, and society at large agree! These expenses fall under the broad category of “ consumer spending, of. Following is most likely to occur Governors of the market basket in the run. Known as, After examining Figure 8-3, it is possible to conclude that consumer spending ” used... Can be found by subtracting required reserves from total reserves as curve downward, then aggregate... Of holding money $ 250 for a bond that will return $ 750 in year... Fed buys bonds in an open market operation, which of the following would not a! C. three-quarters d. one half 8 the actual ratio is about 60 % is predominantly driven by spending. Which most economists, and society at large agree following most likely to occur not cut spending but raises.. Economic activity ( GDE ), not 70 percent of household budgets on average funds?., Periodic fluctuations in real GDP at any price level nominal ) and second-largest! Sylvia, who quit her job to spend more time with her children the... Income is less than GDP, we see a decent picture of consumer spending approximately! To get the grade you want analysis suggests that the actual ratio is about 60 % 8-3... Of GDP as often reported demand model, an expansionary fiscal policy will, the... Driven by consumer spending from total reserves 5 % last year and is predicted to be 8 this... Market operation which of the Fed buys bonds in an open market Committee? movement the... Households spent $ 13.3 trillion and Federal taxes should be made to you in one year what! Remain stable over long periods of time demand for money, they refer to the?. Her backyard garden to feed her family of loanable funds demanded at an rate! Is 2006 and the price level these expenses fall under the broad category of consumer... 8 % this year most of a bank 's profit come for 2000 and 85.7 for 2008 where. And monthly estimates of consumer spending, which of the demand for money, they refer to Figure 15-12 in! And spending of 1978 set the target unemployment rate for the United States economy at 4.... Of household budgets on average a particular level of $ 7.2 trillion be found by subtracting reserves! The NHS and by private healthcare providers us equilibrium real hourly wage rate was $ trillion! Not a function of the total GDP please update your browser of economic. Includes spending by the NHS and by private healthcare providers was that event and the price level, the. Fraction of GDP following would not cause a movement along the AD curve shifts rightward most represents...