Homework Answers
Answer 13. An increase in wealth.
Reason- To Move the economy back to full employment level, AD curve needs to rise and shift to the right. When Wealth rises, demand for output rises, so AD curve shifts rightwards.
When currency appreciates, export falls, Ad falls.
When interest rate rises, investment falls, AD falls.
Decrease in business confidence also reduces AD.
Answer 14. Tax rate stability.
Stable financial system helps banks, keeps the purchasing power of curreny stable by stabilizing inflation and helps in financial transaction. Tax rate stability depends on fiscal policies also.
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If the economy is currently experiencing SRAS and AD intersecting at a level of GDP that...
Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an...
Construct the AD, SRAS, and LRAS curves for an economy experiencing (a) full employment, (b) an economic boom, and (c) a recession. What will happen in each case if it's only temporary? What will happen in each case if it's permanent?
LRAS SRAS Price level AD Real GDP Goods and services market If the economy were operating...
LRAS SRAS Price level AD Real GDP Goods and services market If the economy were operating at point a in Figure 10-8, the real rate of interest would tend to decrease and move the economy toward point b. increase and move the economy toward pointc. increase and move the economy toward point b. decrease and move the economy toward pointc.
A stable financial system is important for all of the following reasons EXCEPT: O facilitating transactions....
A stable financial system is important for all of the following reasons EXCEPT: O facilitating transactions. keeping the purchasing power of the currency stable. O permitting credit institutions (banks) to arise. tax rate stability. Question 15 (2 points) Scott has a Ph.D. in a humanities subject and drives a taxicab for a living. Scott is categorized as: O unemployed. O not part of the labor force. O underemployed. O discouraged.
Based on the graphical representations below illustrating AD, SRAS, and LRAS curves, explain the dynamics and...
Based on the graphical representations below illustrating AD, SRAS, and LRAS curves, explain the dynamics and shifts associated for an economy experiencing: (a) full employment (b) an economic boom (c) a recession
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to...
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the short run at point a, then if the government were to raise the required reserve ratio, then we should expect a/an decrease in SRAS, which moves the economy toward point. Уf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the...
Figure 16-1 Price level LRAS SRAS D AD AD AD Real GDP Refer to Figure 16-1....
Figure 16-1 Price level LRAS SRAS D AD AD AD Real GDP Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium. Using the static AD- AS model in the figure above, this would be depicted as a movement from OD to C Eto A. B to A A to E. Cto B.
Por CPI LRAS, SRAS, Ez AD AD AD, Y, YP Y, Yor Real GDP Which one...
Por CPI LRAS, SRAS, Ez AD AD AD, Y, YP Y, Yor Real GDP Which one of the following statements is correct? A At Ep. the economy is in short-run macroeconomic equilibrium, and the actual U-rate is not equal to the natural rate of unemployment B. At E1, the economy is in long-run macroeconomic equilibrium, and the actual U-rate is equal to the natural rate of unemployment C. At E2, the economy is in short-run macroeconomic equilibrium, and the actual...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy is producing the output level Yp, and a positive demand shock shifts the AD, curve to AD2. The economy now has __ A. a recessionary gap and expansionary fiscal policy can close the gap. B. an inflationary gap and expansionary fiscal policy can close the gap. C. a recessionary gap and contractionary fiscal policy can close the gap. D. an inflationary gap and contractionary...
Suppose that the economy is shown to the right. This economy is currently experiencing O A....
Suppose that the economy is shown to the right. This economy is currently experiencing O A. a recessionary gap. O B. an inflationary gap. O C. deflation. LRAS SRAS O D. crowding out Using the line drawing tool, draw and label the fiscal policy correction that would bring the economy to full employment GDP Properly label this line. Carefully follow the instructions above, and only draw the required objects AD 2 4 6810 12 14 16 18 20 Real GDP...
LRAS SRAS Price level AD Real GDP Goods and services market If the economy were operating at point a in Figure 10-8, the real rate of interest would tend to decrease and move the economy toward point b. increase and move the economy toward pointc. increase and move the economy toward point b. decrease and move the economy toward pointc.
A stable financial system is important for all of the following reasons EXCEPT: O facilitating transactions. keeping the purchasing power of the currency stable. O permitting credit institutions (banks) to arise. tax rate stability. Question 15 (2 points) Scott has a Ph.D. in a humanities subject and drives a taxicab for a living. Scott is categorized as: O unemployed. O not part of the labor force. O underemployed. O discouraged.
LRAS SRAS с Price level AD b Уf Real GDP Goods and services market Refer to Figure: Fiscal Policy 2. If an economy operates in the short run at point a, then if the government were to implement contractionary fiscal policy. then we should expect a/an decrease in SRAS, which moves the economy toward pointc. increase in AD, which moves the economy toward point decrease in AD, which moves the economy toward point b. ZIL P Yf Real GDP Goods...
Figure: Monetary Policy 2 LRAS SRAS C Price level a AD b yf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the short run at point a, then if the government were to raise the required reserve ratio, then we should expect a/an decrease in SRAS, which moves the economy toward point. Уf Real GDP Goods and services market Refer to Figure: Monetary Policy 2. If an economy operates in the...
Figure 16-1 Price level LRAS SRAS D AD AD AD Real GDP Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and automatic stabilizers move the economy back to long-run equilibrium. Using the static AD- AS model in the figure above, this would be depicted as a movement from OD to C Eto A. B to A A to E. Cto B.
Por CPI LRAS, SRAS, Ez AD AD AD, Y, YP Y, Yor Real GDP Which one of the following statements is correct? A At Ep. the economy is in short-run macroeconomic equilibrium, and the actual U-rate is not equal to the natural rate of unemployment B. At E1, the economy is in long-run macroeconomic equilibrium, and the actual U-rate is equal to the natural rate of unemployment C. At E2, the economy is in short-run macroeconomic equilibrium, and the actual...
Por CPI LRAS, SRAS, AD AD, AD Y, Үр Ү, Yor Real GDP Suppose the economy is producing the output level Yp, and a positive demand shock shifts the AD, curve to AD2. The economy now has __ A. a recessionary gap and expansionary fiscal policy can close the gap. B. an inflationary gap and expansionary fiscal policy can close the gap. C. a recessionary gap and contractionary fiscal policy can close the gap. D. an inflationary gap and contractionary...
Suppose that the economy is shown to the right. This economy is currently experiencing O A. a recessionary gap. O B. an inflationary gap. O C. deflation. LRAS SRAS O D. crowding out Using the line drawing tool, draw and label the fiscal policy correction that would bring the economy to full employment GDP Properly label this line. Carefully follow the instructions above, and only draw the required objects AD 2 4 6810 12 14 16 18 20 Real GDP...
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