Homework Answers
The selected options are correct for most of them.
Reiterating as below:
1. Increase
2. Increase
3. Shift to the right
4. Economy B
5. Flatter
6. Steeper.
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Suppose there was a wave of business optimism in the economy. What would the impact be...
Consider a standard Keynesian economy. Which shock would cause the slope of the money demand curve...
Consider a standard Keynesian economy. Which shock would cause the slope of the money demand curve to become steeper? A. Money demand becomes less sensitive to changes in the interest rate B. Money demand becomes more sensitive to changes in the interest rate C. Money demand becomes more sensitive to changes in the output D. Money demand becomes less sensitive to changes in the output
Suppose that the aggregate expenditure curve for an economy can be expressed algebraically as AE =...
Suppose that the aggregate expenditure curve for an economy can be expressed algebraically as AE = 3,000 – 2,000r, where AE is aggregate expenditures and r is the real interest rate expressed as a decimal. If the level of potential output in this economy is 2,825, what is the long-run real interest rate? Instructions: Enter your response as a percent rounded to one decimal place. The long-run real interest rate: ____ %
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy....
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy. Suppose that in 2003, the economy is in macroeconomic equilibrium, with GDP at GDP (year 1). The Fed projects that in 2004, the aggregate demand curve will be AD (year 2), that potential real GDP will be $12.45 trillion (GDP (year 2), and that actual real GDP will be $12.39 trillion LRAS (year 1) LRAS (year 2) SRAS (ycar1) SRAS (year 2 ear Year...
Describe the channels by which monetary policy ripples through the economy and explain how each channel...
Describe the channels by which monetary policy ripples through the economy and explain how each channel operates. Suppose the Bank of Canada raises the overnight loans rate. When the Bank of Canada raises the overnight loans rate, it makes an open market Other short-term interest rates and the exchange rate rise. The quantity of money and the supply of loanable funds decrease The long-term real interest rate rises The higher real interest rate decreases consumption expenditure and investment. The exchange...
Suppose the economy is in a long-run equilibrium, as shown on the following graph. Now suppose...
Suppose the economy is in a long-run equilibrium, as shown on the following graph. Now suppose a wave of business pessimism reduces aggregate demand. On the following graph, shirt a curve or adjust the point to reflect the short-run effect of business pessimism. LRPC Inflation Rate SRPC Unemployment Rate If the Fed undertakes expansionary monetary policy, it return the economy to its original inflation rate and original unemployment rate. Now, suppose the economy is back in long-run equilibrium, and then...
1. Aggregate supply definitions The short-run aggregate supply curve shows: What happens to output in an...
1. Aggregate supply definitions The short-run aggregate supply curve shows: What happens to output in an economy when the government spends more money How firms respond to changes in interest rates Changes in output in an economy as the price level changes, holding all other determinants of real GDP constar The relationship between the price level and aggregate expenditure Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that The price...
Macroeconomic Multiple Choice Questions Answer All 10 Questions* 1) If the Central Bank of Kuwait puts...
Macroeconomic Multiple Choice Questions
Answer All 10 Questions*
1) If the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at full employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
Suppose that autonomous consumption and planned investment in the economy described in problem 5 change to...
Suppose that autonomous consumption and planned investment in the economy described in problem 5 change to Ca = 470 − 15r and Ip = 1,700 − 60r. All other aspects of the structure of the commodity and the money markets are as described in problem 5.(a) Derive the equation for the new IS curve and verify that the equilibrium interest rate and real output are the same as you computed in parts 5g and 5h, respectively.(b) Calculate the slope of...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy. Suppose that in 2003, the economy is in macroeconomic equilibrium, with GDP at GDP (year 1). The Fed projects that in 2004, the aggregate demand curve will be AD (year 2), that potential real GDP will be $12.45 trillion (GDP (year 2), and that actual real GDP will be $12.39 trillion LRAS (year 1) LRAS (year 2) SRAS (ycar1) SRAS (year 2 ear Year...
Describe the channels by which monetary policy ripples through the economy and explain how each channel operates. Suppose the Bank of Canada raises the overnight loans rate. When the Bank of Canada raises the overnight loans rate, it makes an open market Other short-term interest rates and the exchange rate rise. The quantity of money and the supply of loanable funds decrease The long-term real interest rate rises The higher real interest rate decreases consumption expenditure and investment. The exchange...
Suppose the economy is in a long-run equilibrium, as shown on the following graph. Now suppose a wave of business pessimism reduces aggregate demand. On the following graph, shirt a curve or adjust the point to reflect the short-run effect of business pessimism. LRPC Inflation Rate SRPC Unemployment Rate If the Fed undertakes expansionary monetary policy, it return the economy to its original inflation rate and original unemployment rate. Now, suppose the economy is back in long-run equilibrium, and then...
1. Aggregate supply definitions The short-run aggregate supply curve shows: What happens to output in an economy when the government spends more money How firms respond to changes in interest rates Changes in output in an economy as the price level changes, holding all other determinants of real GDP constar The relationship between the price level and aggregate expenditure Which of the following are assumed to remain unchanged along a given short-run aggregate supply curve? Check all that The price...
Macroeconomic Multiple Choice Questions
Answer All 10 Questions*
1) If the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at full employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is...
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...
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5. Discuss the use of fault tree analysis (FTA) for risk
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Given that a sample of aluminium oxide has a Young's modulus of
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