Week 7 Microecon

Myung Park earns 850 per week (flow

Time Warner purchases 100 million in new computer equipment this month (stock

Sally Schmidt has a 1000 in her savings account at a credit union (stock

XYZ . Inc , produces 200 units of output per week (flow

Giorgio Giannelli owns three private jets (stock

Daimler Chrysler 's inventories decline by 750 autos per month (flow

Russia owes 25 billion to the International Monetary Fund (stock

2 . This outcome might be accounted for by the fact that the consumers already fear that the economy is

going towards a recession . The consumers are planning a long-term measure to whether the storm . So instead of seeking a short term measure to cushion the effect of rising prices , consumers are in fact not willing to spend the little money they have until they have the assurance of when the recession will be over The price level did not change because producers see this avenue as a way of making more profit in the face of the harsh economic reality while consumers also see this as an avenue to save more money to manage on until the recession the harsh economy picks up . Also , there has to be an increase in the level of production and also a concomitant increase in the level of aggregate demand of the produced goods if the real GDP is to increase . If the consumers are reluctant to purchase the goods , or if the producers are also not producing more , then the real GDP will not increase significantly...