1. Suppose that due to increased drug addiction in the United States, consumer’s preferences shift toward...
1. 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)Consumption: (increase / decrease / indeterminate / no change)?
b) Savings: (increase / decrease / indeterminate / no change)?
c) Investment: (increase / decrease / indeterminate / no change)?
Homework Answers
Answer-
RBC model is a classical macroeconomic model under which the market fluctuates for a large extent due to real shocks.
Under the situation stated above-
(a) Consumption will be intermediate as food is essiential for survival and irrespective of their preference more of leisure, they will buy food for living.
(b) Saving- saving could decrease as they will not be able to save much because leisure is an expense thing to have.
(c) investment- same is with investment, it is likely to decrease as they will not be able to hold enough money to invest for future.
Add Answer to:
1. Suppose that due to increased drug addiction in the United
States, consumer’s preferences shift toward...
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...
1) Suppose interest rates rise in the United States, but they don't rise in other nations....
1) Suppose interest rates rise in the United States, but they don't rise in other nations. As a result of this change, which of the following is true? I. The demand for the U.S. dollar will increase II. The demand for the U.S. dollar will decrease III. U.S. exports will decrease as a result of the changing value of the U.S. dollar. IV. U.S. exports will increase as a result of the changing value of the U.S. dollar. a) I...
8. Suppose that employers in the United States have discriminatory preferences against Mexican immigrants. All else...
8. Suppose that employers in the United States have discriminatory preferences against Mexican immigrants. All else equal, as the number of discriminatory firms decrease over time, the theory of preference-based discrimination would predict that: (A The relative wages of Mexican immigrants would increase. B. The relative wages of Mexican immigrants would decrease. C. The relative wages of Mexican immigrants would stay the same. D. The change in the relative wage of Mexican immigrants would depend on whether Mexican immigrants are...
Question 16 If the price level increases in the United States relative to foreign...
Question 16 (1 point)If the price level increases in the United States relative to foreign countries, then American consumers will purchase more foreign goods and fewer U.S. goods. This statement describes:Question 16 options:the output effect.the shift-of-spending effect.the real-balances effect.the foreign purchases effect.Question 17 (1 point)Refer to the diagram. If the initial aggregate demand and supply curves are AD0 and AS0, the equilibrium price level and level of real domestic output will be:Question 17 options:E and B, respectively.F and A, respectively.G...
Question 1 Suppose there is a permanent shift of consumer preferences away from pretzels and toward...
Question 1 Suppose there is a permanent shift of consumer preferences away from pretzels and toward potato chips. The most likely result would be in the short run, economic losses in the potato chip market. in the long run, a fall in the supply of potato chips. in the short run, a rise in the price of pretzels. short-run profits in the potato chip market increase. Jestion 2 Question 2 of An economist has estimated that the maintenance of a...
1.8 Suppose that investment as a fraction of output in the United States rises permanently from...
1.8 Suppose that investment as a fraction of output in the United States rises permanently from 0.15 to 0.18. Assume that capital’s share is 13 (a) By about how much does output eventually rise relative to what it would have been without the rise in investment? (b) By about how much does consumption rise relative to what it would have been without the rise in investment? (c) What is the immediate effect of the rise in investment on consumption? About...
- Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against...
- Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the nominal interest rate on the vertical axis). This money demand curve will shift to the right when which of the following occurs? a. an increase in income. b. a reduction in the interest rate. c. an increase in the money supply. d. a decrease in the money supply. II. At the current interest rate, suppose the supply of money is less than the...
Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the...
Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the nominal interest rate (on the vertical axis). This money demand curve will shift to the right when which of the following occurs? a. an increase in income. b. a reduction in the interest rate. c. an increase in the money supply. d. a decrease in the money supply. II. At the current interest rate, suppose the supply of money is less than the demand...
t t Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted...
t t Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the nominal interest rate on the vertical axis). This money demand curve will shift to the right when which of the following occurs? a. an increase in income. b. a reduction in the interest rate. c. an increase in the money supply. d. a decrease in the money supply. II. At the current interest rate, suppose the supply of money is less than...
4. Based on our understanding of the model presented in Chapter 3, we know that an increase in cl (where C c0+ elYD...
4. Based on our understanding of the model presented in Chapter 3, we know that an increase in cl (where C c0+ elYD) will cause )a the ZZ line to become flatter. )cagiven change in autonomous consumption (c0) to have a larger effect on output ) b. the ZZ line to become steeper ) da given change in autonomous consumption (c0) to have a larger-effect on output Opater 5. Suppose the consumption equation is represented by the following: C-250 +...
8. Suppose that employers in the United States have discriminatory preferences against Mexican immigrants. All else equal, as the number of discriminatory firms decrease over time, the theory of preference-based discrimination would predict that: (A The relative wages of Mexican immigrants would increase. B. The relative wages of Mexican immigrants would decrease. C. The relative wages of Mexican immigrants would stay the same. D. The change in the relative wage of Mexican immigrants would depend on whether Mexican immigrants are...
Question 1 Suppose there is a permanent shift of consumer preferences away from pretzels and toward potato chips. The most likely result would be in the short run, economic losses in the potato chip market. in the long run, a fall in the supply of potato chips. in the short run, a rise in the price of pretzels. short-run profits in the potato chip market increase. Jestion 2 Question 2 of An economist has estimated that the maintenance of a...
- Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the nominal interest rate on the vertical axis). This money demand curve will shift to the right when which of the following occurs? a. an increase in income. b. a reduction in the interest rate. c. an increase in the money supply. d. a decrease in the money supply. II. At the current interest rate, suppose the supply of money is less than the...
Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the nominal interest rate (on the vertical axis). This money demand curve will shift to the right when which of the following occurs? a. an increase in income. b. a reduction in the interest rate. c. an increase in the money supply. d. a decrease in the money supply. II. At the current interest rate, suppose the supply of money is less than the demand...
t t Question 1 (5 marks) I. Suppose money demand (on the horizontal axis) is plotted against the nominal interest rate on the vertical axis). This money demand curve will shift to the right when which of the following occurs? a. an increase in income. b. a reduction in the interest rate. c. an increase in the money supply. d. a decrease in the money supply. II. At the current interest rate, suppose the supply of money is less than...
4. Based on our understanding of the model presented in Chapter 3, we know that an increase in cl (where C c0+ elYD) will cause )a the ZZ line to become flatter. )cagiven change in autonomous consumption (c0) to have a larger effect on output ) b. the ZZ line to become steeper ) da given change in autonomous consumption (c0) to have a larger-effect on output Opater 5. Suppose the consumption equation is represented by the following: C-250 +...
Most questions answered within 3 hours.
-
develop an automated invoice generator that helps a shop owner
to design their invoice. Problem 1...
asked 2 minutes ago -
2. Binomial Distribution Suppose I have an unfair coin, it lands
on heads 75% of the...
asked 16 minutes ago -
negotiators with absolutely no alternative to a negotiated
agreement sometimes.
a. become hostile and end the...
asked 14 minutes ago -
Write a Verilog program that tests whether a 4-bit input
variable is a Fibonacci number or...
asked 24 minutes ago -
MYSQL
Consider the sql statement "select * from t1 UNION t2" where t1
and t2 are...
asked 27 minutes ago -
2. A retailer sells 10,000 units at $10. Each unit costs the
retailer $7.00 to sell,...
asked 29 minutes ago -
If the Stratosphere elevator in Las Vegas is 500 m above the
ground when the cables...
asked 42 minutes ago -
identify at least one other characteristics of the soils/sand
that may have impacted the growth of...
asked 48 minutes ago -
True or False
The following statements refer to The Web of Belief
10. An explanation of...
asked 50 minutes ago -
15)___________ A study was conducted to
test the effectiveness of aspirin on reducing
asked 57 minutes ago -
How fast must a centrifuge spin if a particle 8 cm from the axis
of rotation...
asked 58 minutes ago -
Which of the following is characteristic of a single exposure
common vehicle outbreak?
a. Wide range...
asked 1 hour ago