Homework Answers
Answer: (c)
The real interest is critical factor in determining level of investment. Real interest rate ceiling will cause the rise in the investment, so the output and employment will rise.
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33. Using the Keynesian model, the effect of a government-imposed ceiling on interest rates paid on...
E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run...
E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run egun A) where the IS and LA curves intersect. Where the IS curve. Meurve. and FE lines inters C) where the IS curve intersects the FB fine. D) where the LM curve intersects the Fence he money supply will cause 27 In the Keynesian model in the short A) a decrease in output and an increase in the real B) an increase in the...
Suppose there is a decrease in interest rates. Using the AD-AS model and starting at a...
Suppose there is a decrease in interest rates. Using the AD-AS model and starting at a long-run equilibrium, what would be the short-run effect? Group of answer choices A . A decrease in Real GDP, a decrease in the GDP Deflator B. No change in Real GDP, an increase in the GDP Deflator C. An increase in Real GDP, an increase in the GDP Deflator D. No change in Real GDP, a decrease in the GDP Deflator
[8] In Keynesian economics the most important factor determining whether the level of economic activity is...
[8] In Keynesian economics the most important factor determining whether the level of economic activity is growing or shrinking is: A) the multiplier effect. B) government expenditure and tax policies. C) the behavior of nonincome-determined spending. D) the relationship between leakages from and injections into the spending stream. [9] Using the Keynesian approach, if leakages from the spending stream are less than injections, the current level of output is: A) less than the equilibrium level of output, and will increase....
Suppose that a price ceiling on interest rates is imposed at 25%. Which of the following...
Suppose that a price ceiling on interest rates is imposed at 25%. Which of the following is true? Select all that apply: If the equilibrium interest rate in the market is 20%, the price will effectively rise to the ceiling level of 25%. If the equilibrium interest rate in the market is 30%, the price will effectively be lowered to the ceiling level of 25%. If the equilibrium interest rate in the market is 35%, the price will remain at...
In the Keynesian model, suppose the Fed sets a target for the real interest rate. If...
In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts to the left, and the Fed wants to keep output unchanged A. taxes will increase. OB. the money supply will decline. C. the real interest rate will decrease D. taxes will decrease.
5. In the Keynesian model which of the following would be most likely to have the largest impact on aggregate demand a. an increase in the money supply b. a change in government expenditure c. a chan...
5. In the Keynesian model which of the following would be most likely to have the largest impact on aggregate demand a. an increase in the money supply b. a change in government expenditure c. a change in investment expectations d. both a and c e. both b and c 6. In the Keynesian theory of liquidity demand and the interest rate which of the following occurs during excess supply of money. a. individuals sell bonds, driving interest rates down...
Qui Quesson 42 Using the Keynesian Cross (PAE) Model, explain the effect of an increase in...
Qui Quesson 42 Using the Keynesian Cross (PAE) Model, explain the effect of an increase in the exchange rate (e is denoted as foreign over home currency) on the short run equilibrium output. Graphical analysis must be provided along with the intuition to receive fuill credit. Not yet Points out of 600 Flag question
1. A decrease in interest rates will ___ the cost of acquiring funds for investment projects,...
1. A decrease in interest rates will ___ the cost of acquiring funds for investment projects, other things equal. -Increase -Have an indeterminate effect on -Not change -Decrease 2. The IS curve -Shows combinations of interest rates and output levels where the goods market is in equilibrium -Is upward sloping because higher interest rates increase aggregate demand -Was created by the CIA in the 1960s as anti-Soviet propaganda -Shifts if the money supply changes 3. If firms invent new technologies,...
B4. Closed economy Keynesian model: The aggregate demand-side of the economy Rigidia is well-described by a...
B4. Closed economy Keynesian model: The aggregate demand-side of the economy Rigidia is well-described by a standard IS-LM-FE framework while the short-run aggregate supply side is characterized by (SRAS) aggregate output/income, Y is the full employment output level, P is the Here Y is realized aggregate realized price level, Pe is the expected price level and b is a constant that depends on the slope of the labour demand curve. Explain the effects of each of the following on the...
17. Consider the Keynesian model discussed in class. If Y>PAE, then the economy: a. Is in...
17. Consider the Keynesian model discussed in class. If Y>PAE, then the economy: a. Is in equilibrium and experiencing a contractionary gap b. Is in equilibrium and inventories are lower than planned Is in disequilibrium and experiencing an expansionary gap c. d. Is in disequilibrium and inventories are higher than planned 18. Consider the Keynesian model discussed in class. If the re is a contractionary gap, then the economy: a. Is in equilibrium and inventories are higher than planned b....
E) none of the above un equilibrium occurs les intersect. 26. In the Keynesian model, short-run egun A) where the IS and LA curves intersect. Where the IS curve. Meurve. and FE lines inters C) where the IS curve intersects the FB fine. D) where the LM curve intersects the Fence he money supply will cause 27 In the Keynesian model in the short A) a decrease in output and an increase in the real B) an increase in the...
In the Keynesian model, suppose the Fed sets a target for the real interest rate. If the IS curve shifts to the left, and the Fed wants to keep output unchanged A. taxes will increase. OB. the money supply will decline. C. the real interest rate will decrease D. taxes will decrease.
5. In the Keynesian model which of the following would be most likely to have the largest impact on aggregate demand a. an increase in the money supply b. a change in government expenditure c. a change in investment expectations d. both a and c e. both b and c 6. In the Keynesian theory of liquidity demand and the interest rate which of the following occurs during excess supply of money. a. individuals sell bonds, driving interest rates down...
Qui Quesson 42 Using the Keynesian Cross (PAE) Model, explain the effect of an increase in the exchange rate (e is denoted as foreign over home currency) on the short run equilibrium output. Graphical analysis must be provided along with the intuition to receive fuill credit. Not yet Points out of 600 Flag question
B4. Closed economy Keynesian model: The aggregate demand-side of the economy Rigidia is well-described by a standard IS-LM-FE framework while the short-run aggregate supply side is characterized by (SRAS) aggregate output/income, Y is the full employment output level, P is the Here Y is realized aggregate realized price level, Pe is the expected price level and b is a constant that depends on the slope of the labour demand curve. Explain the effects of each of the following on the...
17. Consider the Keynesian model discussed in class. If Y>PAE, then the economy: a. Is in equilibrium and experiencing a contractionary gap b. Is in equilibrium and inventories are lower than planned Is in disequilibrium and experiencing an expansionary gap c. d. Is in disequilibrium and inventories are higher than planned 18. Consider the Keynesian model discussed in class. If the re is a contractionary gap, then the economy: a. Is in equilibrium and inventories are higher than planned b....
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