Homework Answers
1.
Ans: The inflation rate is positive.
Explanation:
Point A shows that actual output is greater than natural on and this causes short term positive change in inflation.
2.
Ans: Output is lower than the natural level of output.
Explanation:
Unemployment higher than natural rate implies employment is lower than natural rate of employment.
Since output and employment go hand in hand, output is lower than natural rate in this case.
If you are satisfied with the answer, please provide a positive rating. Feel free to comment in case of queries.
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In this question you are expected to match the right question to the right answer.... When...
please answer Question 7: Inflation targeting and the Taylor rule in the IS-LM model Consider a...
please answer Question 7:
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation,...
6. 7. Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
6. 7. Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
Question 65 1.33 pts "Considering only aggregate supply curve, when output is greater than the natural...
Question 65 1.33 pts "Considering only aggregate supply curve, when output is greater than the natural level:" OC) the unemployment rate is equal to the natural unemployment rate. OB) the unemployment rate is greater than the natural unemployment rate. O A) the price level is greater than the expected price level. OD) the price level will be lower next period than this period. E) Price doesn't change next period
Please match the right answer to each question A change in which of these variables will...
Please match the right answer to each question A change in which of these variables will cause permanent change in the natural level of output (i.e. the economy will shift from Y to Y.)? ✓ Choose... increase in money supply will, in the medium-run only affect the price level but nor output or the interest rate.. mark-up m and changes in fiscal policy increase in money supply will, in the medium-run affect output and the interest rates but not price...
1) The long-run aggregate supply curve shifts to the right when there is A) a decrease...
1) The long-run aggregate supply curve shifts to the right when there is A) a decrease in the total amount of capital in the economy. B) a decrease in the total amount of labor supplied in the economy. C) a decrease in the available technology. D) a decline in the natural rate of unemployment. 2) The short-run aggregate supply curve shifts to the right when A) output gap is higher. B) output gap is lower. C) expected inflation is higher....
one big problem. thank you!! Problem 3: AS-AD Relation Part II (20pts) AS-AD model can be used to explain how the economy transitions from the short-run to the medium-run 3a. (1pt) Can price be hi...
one big problem. thank you!!
Problem 3: AS-AD Relation Part II (20pts) AS-AD model can be used to explain how the economy transitions from the short-run to the medium-run 3a. (1pt) Can price be higher than expected price in the short run? 3b. (1pt) if P> Pe in the short run, what happens to Pe when we go from short-run to medium-run? 3c. (2pt) If Pe increases, would AD curve shift or would AS curve shift? How would it shift?...
i only need question 5, thanks 4. Suppose that the Phillips curve is given by TT,...
i
only need question 5, thanks
4. Suppose that the Phillips curve is given by TT, = 1 + 0.1 - 2u a. What is the natural rate of unemployment? Assume that expected inflation is given by m = (1 - 0) +010-1 And suppose that is initially equal to zero and it is given and does not change. It could be zero or any positive value. Suppose that the rate of unemployment is initially equal to the natural rate....
Question 7 0.2 pts For this question, assume that expected inflation this year is equal to past year's inflation. Also...
Question 7 0.2 pts For this question, assume that expected inflation this year is equal to past year's inflation. Also assume that the unemployment rate has been equal to the natural rate of unemployment for some time. Given this information, we know that: the rate of inflation should be zero. the rate of inflation should neither increase nor decrease. the rate of inflation should steadily increase. the rate of inflation should steadily decrease. the natural rate of unemployment should steadily...
7) An increase in the price of oil will likely cause which of the following? A) increase the mark...
7) An increase in the price of oil will likely cause which of the following? A) increase the markup in the Phillips curve equation B) increase the sum "m z" in the Phillips curve equation C) increase the natural rate of unemployment D) all of the above 8) Suppose the Phillips curve is represented by the following equation: -mt-1-0.2-2ut- Given this information, we know that the natural rate of unemployment in this economy is A) 1096. B) 20%. C) 6.5%....
please answer Question 7:
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation,...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
6.
7.
Inflation targeting and the Taylor rule in the IS-LM model Consider a closed economy in which the central bank follows an interest rate rule. The IS relation is given by Y C(Y- T) I(Y,r) G Where r is the real interest rate. The central bank sets the nominal interest rate according to the rule i = i* + a(n° =- T*) + b(Y- Y1) Where T is expected inflation, T* is the target rate of inflation, and Yn...
Question 65 1.33 pts "Considering only aggregate supply curve, when output is greater than the natural level:" OC) the unemployment rate is equal to the natural unemployment rate. OB) the unemployment rate is greater than the natural unemployment rate. O A) the price level is greater than the expected price level. OD) the price level will be lower next period than this period. E) Price doesn't change next period
Please match the right answer to each question A change in which of these variables will cause permanent change in the natural level of output (i.e. the economy will shift from Y to Y.)? ✓ Choose... increase in money supply will, in the medium-run only affect the price level but nor output or the interest rate.. mark-up m and changes in fiscal policy increase in money supply will, in the medium-run affect output and the interest rates but not price...
1) The long-run aggregate supply curve shifts to the right when there is A) a decrease in the total amount of capital in the economy. B) a decrease in the total amount of labor supplied in the economy. C) a decrease in the available technology. D) a decline in the natural rate of unemployment. 2) The short-run aggregate supply curve shifts to the right when A) output gap is higher. B) output gap is lower. C) expected inflation is higher....
one big problem. thank you!!
Problem 3: AS-AD Relation Part II (20pts) AS-AD model can be used to explain how the economy transitions from the short-run to the medium-run 3a. (1pt) Can price be higher than expected price in the short run? 3b. (1pt) if P> Pe in the short run, what happens to Pe when we go from short-run to medium-run? 3c. (2pt) If Pe increases, would AD curve shift or would AS curve shift? How would it shift?...
i
only need question 5, thanks
4. Suppose that the Phillips curve is given by TT, = 1 + 0.1 - 2u a. What is the natural rate of unemployment? Assume that expected inflation is given by m = (1 - 0) +010-1 And suppose that is initially equal to zero and it is given and does not change. It could be zero or any positive value. Suppose that the rate of unemployment is initially equal to the natural rate....
Question 7 0.2 pts For this question, assume that expected inflation this year is equal to past year's inflation. Also assume that the unemployment rate has been equal to the natural rate of unemployment for some time. Given this information, we know that: the rate of inflation should be zero. the rate of inflation should neither increase nor decrease. the rate of inflation should steadily increase. the rate of inflation should steadily decrease. the natural rate of unemployment should steadily...
7) An increase in the price of oil will likely cause which of the following? A) increase the markup in the Phillips curve equation B) increase the sum "m z" in the Phillips curve equation C) increase the natural rate of unemployment D) all of the above 8) Suppose the Phillips curve is represented by the following equation: -mt-1-0.2-2ut- Given this information, we know that the natural rate of unemployment in this economy is A) 1096. B) 20%. C) 6.5%....
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