show both changes in graph and answerHomework Answers
a) Output Supply Increases
b) Output demand remains unaffected
c) Labor supply remains unaffected
d) Labor demand increases
e) Money supply increases
f) Money demand remains unaffected
g) Output increases
h) Interest rate declines
i) Employment increases
j) Wages increases
k) Prices decrease
l) Decrease
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show both changes in graph and answer
2. Assume the economy is initially in equilibrium, and...
2. Assume the economy is initially in equilibrium, and then firms expect future total factor productivity,...
2. Assume the economy is initially in equilibrium, and then firms expect future total factor productivity, z', to decrease. Using the New Keynesian Model framework, what are the implications on the following outcomes. For the money market, use the framework with interest rates on the vertical axis. f) Wages (increase / decrease / indeterminate / no change)? g) Money supply increase / decrease / indeterminate / no change)? h) Money demand increase / decrease / indeterminate / no change)? i)...
Suppose you run the central bank in an open economy. What happens to the following variables...
Suppose you run the central bank in an open economy. What happens to the following variables of interest in response to the below events (analyze each event separately)? The president restricts the import of Chinese goods Use the standard open economy IS-LM model (not the Fleming-Mundell model). Also, assume direct effects of shifts are larger than indirect effects. a) IS – Direct Effect (increase / decrease / indeterminate / no change)? b) IS – Exchange Rate Effect (increase / decrease...
Suppose you run the central bank in an open economy. What happens to the following variables...
Suppose you run the central bank in an open economy. What happens to the following variables of interest in response to the below events (analyze each event separately)? The president restricts the import of Chinese goods Use the standard open economy IS-LM model (not the Fleming-Mundell model). Also, assume direct effects of shifts are larger than indirect effects. a) IS – Direct Effect (increase / decrease / indeterminate / no change)? b) IS – Exchange Rate Effect (increase / decrease...
(6) Imagine that the economy is in a recession. Which one of the following tactics is...
(6) Imagine that the economy is in a recession. Which one of the following tactics is a way to increase output by shifting aggregate demand outward? Raising taxes to increase the government surplus Increasing government spending Increasing the required reserve ratio Imposing tariffs on foreign goods (7) In the short run, supply shocks cause prices to __________ and the quantity demanded to __________. increase; increase increase; decrease decrease; increase decrease; decrease (8) Good deflation...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0 and the government removed import quotas, what would happen to the exchange rate? a. It would appreciate to E1. b. It would appreciate to E2. c. It would depreciate to E1. d. It would depreciate to E2. ____ 10. When a country experiences capital flight, which of the following best explains the effects? a. The interest rate falls because the demand for loanable funds shifts left....
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...
I. The economy of Zarland is operating below the full-employment level of output with a balanced budget. (a) Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, a...
I. The economy of Zarland is operating below the full-employment level of output with a balanced budget. (a) Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, and aggregate demand, and show each of the following. (Gi) The country's current equilibrium output and price level, labeled Yj and PL1. respectively (ii) The full-employment output, labeled Yf (b) Ir Zarland increases government expenditures and taxes by equal amounts, can aggregate demand increase? Explain. (c) If Zarland decides to...
1. The economy is experiencing high unemployment and a low rate of economic growth and the...
1. The economy is experiencing high unemployment and a low rate of economic growth and the Bank of Canada decides to pursue an expansionary monetary policy. Which action by the Bank of Canada would be most consistent with this policy? 4. If the money GDP is S600 billion and, on the average, ench dollar is spent three times per year, then the amount of money demanded for transactions purposes: will be $1800 billion. buying government securities will be 5600 billion...
Suppose that due to increased drug addiction in the United States, consumer’s preferences shift toward more...
Suppose that due to increased drug addiction in the United States, consumer’s preferences shift toward more leisure and less consumption goods. Using the RBC Model, what are the impacts on the following outcomes: a) Labor supply curve: (increase / decrease / indeterminate / no change)? b) Labor demand curve: (increase / decrease / indeterminate / no change)? c) Employment: (increase / decrease / indeterminate / no change)? d) Wages: (increase / decrease / indeterminate / no change)? e) Output: (increase...
Use the graph to answer the questions below: Assume that the economy is initially at point...
Use the graph to answer the questions below:
Assume that the economy is initially at point X. Suppose a fall
in consumer spending growth moves the economy to point Z. In
theory, the government can
(increase/decrease)?
aggregate demand by
(2%, 3%, 5%, 8%, 10%)?
to steer the economy back to the original equilibrium of point
X. Suppose the economy is at point W. In theory, the government
can
(increase/decrease)?
aggregate demand by
(2%, 3%, 5%, 8%, 10%)?
to steer the...
2. Assume the economy is initially in equilibrium, and then firms expect future total factor productivity, z', to decrease. Using the New Keynesian Model framework, what are the implications on the following outcomes. For the money market, use the framework with interest rates on the vertical axis. f) Wages (increase / decrease / indeterminate / no change)? g) Money supply increase / decrease / indeterminate / no change)? h) Money demand increase / decrease / indeterminate / no change)? i)...
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...
I. The economy of Zarland is operating below the full-employment level of output with a balanced budget. (a) Draw a correctly labeled graph of short-run aggregate supply, long-run aggregate supply, and aggregate demand, and show each of the following. (Gi) The country's current equilibrium output and price level, labeled Yj and PL1. respectively (ii) The full-employment output, labeled Yf (b) Ir Zarland increases government expenditures and taxes by equal amounts, can aggregate demand increase? Explain. (c) If Zarland decides to...
1. The economy is experiencing high unemployment and a low rate of economic growth and the Bank of Canada decides to pursue an expansionary monetary policy. Which action by the Bank of Canada would be most consistent with this policy? 4. If the money GDP is S600 billion and, on the average, ench dollar is spent three times per year, then the amount of money demanded for transactions purposes: will be $1800 billion. buying government securities will be 5600 billion...
Use the graph to answer the questions below:
Assume that the economy is initially at point X. Suppose a fall
in consumer spending growth moves the economy to point Z. In
theory, the government can
(increase/decrease)?
aggregate demand by
(2%, 3%, 5%, 8%, 10%)?
to steer the economy back to the original equilibrium of point
X. Suppose the economy is at point W. In theory, the government
can
(increase/decrease)?
aggregate demand by
(2%, 3%, 5%, 8%, 10%)?
to steer the...
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