Homework Answers
Putting real interest function which is function of inflation, in IS curve will replace r and put inflation as a variable.
So IS curve will show income or total spending function of inflation.
Option D is right.
Note: putting one function into another one just gives a new relation or function ,it doesn't change the existing relationship.
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rses / ECON 102/1-2020/SPRODAT! Suppose that the central bank were to choose an interest rate that...
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Macroeconomic Multiple Choice Questions
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Question #10 homework help ?
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Question 1 (42 p) Consider a closed economy where goods market and finalcial markets can be described by the following equations for period t С,-100 + 0.5yo- 2000.25Y- 200r G- 100: T-200 Suppose inflation escpectations in this economy is based on past period's inflation rate, ie. Let Yo- FIN)-No the labor force is given as constant at LF- 1000. (4p) Write down the IS equation for this economy (4p) Assume a horizontal LM function where the Central Bank announces the...
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...
H. = H, = H (6) You are to assume that H , the long-run demand for housing, is equal to the demand for housing you found in part 1. Using this, write out expressions for the two semi-elasticities of long-run house prices in terms of each tax rate. 3. What do your equations for the short- and long-run semi-elasticities say about the reaction of house prices in each period? Briefly describe what is happening. 4. The government wants to...
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...
Question #10 homework help ?
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