Suppose that the European annual potential real GDP in 2011 was estimated to be €200 billion, and the annual natural rate of unemployment was estimated to be 4.5%. In 2011, the actual annual European real GDP in 2011 was €350 billion, the actual annual European unemployment rate was 3.5%, and the European actual annual inflation rate was 8.2%. What open market operation would you have suggested that the European Central bank do? Explain how your suggested open market operation would have worked to bring the European economy back to its full employment level. |
Since the specific yearly genuine total national output surpasses the yearly potential genuine total national output along the edge of an actually high rate of expansion of eight.2%, the ecu budgetary establishment ought to mediate and actualize a contractionary monetary strategy by taking an interest in open market buy of administration securities. partner degree open market buy of securities lessens funds inside the economy and cuts down every genuine total national output and expansion rates. rate would increment and achieve its characteristic rate moreover.
Suppose that the European annual potential real GDP in 2011 was estimated to be €200 billion,...
Suppose that actual real GDP in Merryland is $400 billion and its potential GDP is $465 billion. If the natural rate of unemployment is 3%, what is its present unemployment rate? Present unemployment rate is 7 %. Enter your response rounded to one decimal place .
Year Actual Real GDP Potential GDP Price Level Unemployment 2017 KD 12.4 billion KD 12.4 billion 100 4.5 % 2018 KD 10.5 billion KD 12.4 billion 96 16% 2019 KD 12.7 billion KD 12.4 billion 105 3% 1. Describe country's macroeconomic condition in these three years in terms of macroeconomic equilibrium and business cycle. Describe all macroeconomic indicators?
In Okunland, a country whose economy operates according to Okun's law, real GDP equals $7,520 billion, potential GDP equals $8,000 billion, and the actual unemployment rate is 8 percent. What is the natural rate of unemployment in Okunland? Multiple Choice 11 percent 2 percent 5 percent 6 percent
In Okunland, a country whose economy operates according to Okun's law, real GDP equals $7,520 billion, potential GDP equals $8,000 billion, and the actual unemployment rate is 8 percent. What is the natural rate of unemployment in Okunland? A) 5 percent B) 6 percent C) 11 percent D) 2 percent
Question 20 (6 points) Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? _.00 Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be _.00% A/
Page 2 Suppose full employment real GDP is $1,000 billion and the money supply is $800 billion. Suppose also that the monetary velocity is constant and equal to 5. What is the price level? 00 Page 3: Now suppose the Fed increases the money supply by 4% and potential real GDP rises by 3%. In the long run, the inflation rate would be 00% Page 4 Previous Page Next Page Page 9 of 28 Page 5: Submit Quiz 26 of...
Question 28 (5 points) Saved Suppose full employment real GDP is $2,000 billion and the money supply is $1,000 billion. Suppose also that the monetary velocity is constant and equal to 4. What is the price level? 2 Now suppose the Fed increases the money supply by 6% and potential real GDP rises by 3%. In the long run, the inflation rate would be .00% Previous Page Next Page Page 28 of 31 Submit Quiz 29 of 31 questions saved
of 40> Suppose the Fed sells $500 billion in government securities and the reserve ratio is 0.1. Calculate the resulting change in the money supply. Be certain to include a negative sign. change in the money supply: $ billion Next, show the impact this open market operation wilEhave on the graph in the short run 10 Solow growth curve Short-run aggregate supply 7 Next, show the impact this open market operation will have on the graph in the short run....
The GDP gap is the difference between: a. frictional unemployment and actual real GDP. b. unemployment rate and real GDP deflator. c. actual real GDP and full-employment real GDP. d. full-employment real GDP and real GDP deflator. Inflation is an increase in: a. prices of all products in the economy. b. homes, autos and basic resources. c. the general price level of products. d. none of these. 46. Suppose that last year you borrowed $100 at 5 percent interest to...
In order to maintain a stable and low inflation, European Central Bank (ECB) would like to increase the interest rates in the economy. What open market operation (OMO) action should the ECB take? Explain in detail the OMO process and its implications for the cash rate, interest rates, inflation and GDP. Draw the effect of the OMO process using the Money Demand-Money Supply (MD-MS) diagram.