Why do we no longer study the IS-LM model in economics? (i.e. why is it now...
Why do we no longer study the IS-LM model in economics? (i.e. why is it now considered the IS model instead?)
Homework Answers
We are not studying the IS-LM model in economics because of the following limitations:
-- IS-LM model is a comparative-static equilibrium model; that does not take into consideration the time-lags which are significant today in examining the effects of economic policy changes.
-- IS-LM model also termed as fix-price model, does not enable in examining the impacts of changes in aggregate demand on both prices and output
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Why do we no longer study the IS-LM model in economics? (i.e.
why is it now...
Why do we use a simplified model of supply and demand when studying basic economics?
Why do we use a simplified model of supply and demand when studying basic economics?
Due to the dominance of the competitive model in the study of economics, the entrepreneur has...
Due to the dominance of the competitive model in the study of economics, the entrepreneur has been often overlooked. Explain why this may have been the case.
why should we give you a scholarship to study MSc. Economics? I have a scholarship interview...
why should we give you a scholarship to study MSc. Economics? I have a scholarship interview tomorrow please help me with ideas
Given the normal IS-LM and AD-AS DescriptionA liquidity trap is a situation, described in Keynesian economics,...
Given the normal IS-LM and AD-AS
DescriptionA liquidity trap is a situation, described in Keynesian
economics, in which, "after the rate of interest has fallen to a
certain level, liquidity preference may become virtually absolute
in the sense that almost everyone prefers holding cash rather than
holding a debt which yields so low a rate of interest."
(1) Show the effect of the increase of M by the government using graphs. (Be careful about intersection points in the graphs.) (2)...
When it comes to Economics, we are free to do what we please as to the...
When it comes to Economics, we are free to do what we please as to the purchasing and consumption of goods and the like. In our history, it appears that every civilized society has always maintained a form of government. Governments exist to protect the individual freedoms of each person but an also to promote the well being of the communities we live in. When thinking about this and Economics, I ultimately think of the economics of how we are...
Explain in detail why the aggregate demand curve slopes downward in the standard IS-LM model. Then...
Explain in detail why the aggregate demand curve slopes downward in the standard IS-LM model. Then explain why the Long-run Aggregate Supply Curve is vertical.
Why do we need phonology (i.e. why are words made up from a small inventory of...
Why do we need phonology (i.e. why are words made up from a small inventory of phonemes)? Why aren't whole words just treated as different sounds.
IS-LM Model- Consider an economy in the short-run with the price level P fixed at 1...
IS-LM Model- Consider an economy in the short-run with the price level P fixed at 1 (P = 1). Now we have I = I(r), a financial sector and taxes a function of income. C = 100 + 0.75 * (Y –T)I = 750 –20 * r T = -40 + (1/3)Y G = 1000; Y = C + I + G (M/P)d= 0.4 * Y –48 * i Ms= 1,200(M/P)d= Ms/P Suppose investors and bond traders expect inflation, πe=...
Use the IS-LM-PC model with an inflation-targeting central bank to answer the following short answer questions....
Use the IS-LM-PC model with an inflation-targeting central bank to answer the following short answer questions. In this question, you don’t need to explain or show the graph. But, when you’re not sure of the answer, don’t guess; instead, use the IS-LM-PC model to help you. An increase in the risk premium. Inflationary expectations are adaptive. i. What happens to inflation over time? ii. What does the central bank need to do to return to the medium-run equilibrium?
STUDY QUESTIONS 1. Of what use is a market model? How do we relate it to...
STUDY QUESTIONS 1. Of what use is a market model? How do we relate it to reality? 2. Why does perfect competition simplify both marketing and procurement for a manager? 3. What is meant by the entry and exit of firms? Why are entry and exit easy or difficult in the various market models? 4. How do demand curves vary in the different market models? How does each affect managerial behavior and planning? 5. What is a supply-and-demand model? 6....
Given the normal IS-LM and AD-AS
DescriptionA liquidity trap is a situation, described in Keynesian
economics, in which, "after the rate of interest has fallen to a
certain level, liquidity preference may become virtually absolute
in the sense that almost everyone prefers holding cash rather than
holding a debt which yields so low a rate of interest."
(1) Show the effect of the increase of M by the government using graphs. (Be careful about intersection points in the graphs.) (2)...
STUDY QUESTIONS 1. Of what use is a market model? How do we relate it to reality? 2. Why does perfect competition simplify both marketing and procurement for a manager? 3. What is meant by the entry and exit of firms? Why are entry and exit easy or difficult in the various market models? 4. How do demand curves vary in the different market models? How does each affect managerial behavior and planning? 5. What is a supply-and-demand model? 6....
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