Homework Answers
3. Ans -
Okun's law
In simple words,
(Actual GDP - Potential GDP) / ( potential GDP) = 2*( Actual unemployment - natural unemployment)
Let potential GDP = Y
PUt values, we get
(20 - Y)/Y = -2*(8% - 4%)
(20-Y)/ Y = -2*4%
(20 - Y)/ Y = - 8%
20 - Y = - 0.08Y
20 = 0.92Y
Y = 21.74 trillions
Potential GDP = 21.74 trillion
4.
Deposit Ratio = Bank reserve/Bank deposit
Deposit = 100/0.25
= 400
Money Supply = Bank deposit + Currency hold by Public
= 400 + 200
= 600
1. The table below shows data on the behavior of the money supply during the onset...
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trillion/ 16 trillion/ 10 trillion / 14 trillion /12
trillion
2. currently _____ recessionary gap / inflationary
gap
3. of ______ 4 trillion / 1 trillion / 5 trillion / 2
trillion / 3 trillion
4. the Fed will ____ increase / decrease
5. which will _____ increase/ decrease
6. incentive to ____ increase / decrease
7. shifting the ____ AD / SRAS / LRAS
8. curve to the ____ left / right
9. relatively high...
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1.
2.
3.
4.
5.
According to the neoclassical model, a contractionary monetary policy will Select the correct answer below: O only lower the price level O only raise the price level O lower the price level and real GDP in the long run lower the price level bur raise GDP In the short run, which of the following prevent the economy from operating at potential output? Select the two correct answers below. Select all that apply: limits in technology...
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1. The table below shows data on the behavior of the money supply during the onset of the Great Depression. Fill in the empty cells for parts (a)-(g). August 1929 March 1933 26.5 19.0 3.9 5.5 22.6 (e) 8.4 2.9 (b) C) (g) (d) 0.41 1.109 0.817 56.24 31.78 Money Supply Currency Deposits Monetary Base Reserves Money Multiplier Reserve-Deposit Ratio Currency-Deposit Ratio Real GDP Nominal GDP (a) 3.2 2. A bank has the following entries on its balance sheet, but...
tv - x 6 + 2 5 Homework Assignment x B pdf.pdf pdf-1.pdf → 0 0 file:///C:/Users/ayesha/Documents/HRM/Homework%20Assignment%201.pdf of 6 lo – + O Fit to page CD Page view A Read aloud L Add notes 6 H EB 6 4. (15 pts) Consider the three stocks in the following table. Pt represents price at time t, and Qt represents shares outstanding at time t. Stock C splits two-for-one in the last period. PO QOPQiP2Q2 $90 100 $95 100 $95 100...
1. GDP is _____ 11
trillion/ 16 trillion/ 10 trillion / 14 trillion /12
trillion
2. currently _____ recessionary gap / inflationary
gap
3. of ______ 4 trillion / 1 trillion / 5 trillion / 2
trillion / 3 trillion
4. the Fed will ____ increase / decrease
5. which will _____ increase/ decrease
6. incentive to ____ increase / decrease
7. shifting the ____ AD / SRAS / LRAS
8. curve to the ____ left / right
9. relatively high...
1.
2.
3.
4.
5.
According to the neoclassical model, a contractionary monetary policy will Select the correct answer below: O only lower the price level O only raise the price level O lower the price level and real GDP in the long run lower the price level bur raise GDP In the short run, which of the following prevent the economy from operating at potential output? Select the two correct answers below. Select all that apply: limits in technology...
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