If the RBA believes that economy is in a recession, what actions could it take? Use...
Homework Answers
Answer - If RBA wants to take the economy out of recesison , it can take the following measures -
1- Purchase the government securities in the open market such as to increase the liquidity in the economy
2 - Decrease the reserve requirement rate sonad to increase the lending power of banks
3 - Decrease the doscount rates so as to make the loans cheaper
These tools will help to increase the supply of money in the economy. As a result of this , the consumption and investment in the economy will increase. This will lead to rise in AD ,real GDP and the level of employement which will help the economy to come out of recession
Add Answer to:
If
the RBA believes that economy is in a recession, what actions could
it take? Use...
3.18 A massive decrease in aggregate demand plunges the U.S. economy into a recession and unemployment...
3.18 A massive decrease in aggregate demand plunges the U.S. economy into a recession and unemployment rates soar to 10%. According to the classical model of macroeconomic equilibrium the economy will stagnate in a recession unless measures are taken to increase aggregate demand nominal wages will decline increasing aggregate supply until full employment is restored nominal wages will remain fixed the aggregate supply curves will shift inward making the recession worse the price level will not decline Key Concepts: Classical...
Suppose the economy is currently in short run macroeconomic equilibrium at a real GDP level of...
Suppose the economy is currently in short run macroeconomic equilibrium at a real GDP level of $14 trillion. The full employment level of output is $12 trillion. What could the government do to avoid a demand pull inflation situation? Your answer must be specific in giving all of the actions that could taken by the government and what impact these actions would have on the aggregate demand/supply model to avoid the demand-pull inflation situation. D oo - FormatVBI U -
the economy is experiencing a recession and high unemployment a. Use an AD-AS model together with the Fed Funds market to represent ther short ran equilibrium in b. What types of monetary policy...
the economy is experiencing a recession and high unemployment a. Use an AD-AS model together with the Fed Funds market to represent ther short ran equilibrium in b. What types of monetary policy (i.e.. expansionary or restrictive) should the Fed implement? c. In implementing the policy you suggest. which actions (please give at least two actions) should the Fed take to achieve this policy? Explain how t he y policy would address this problem and the consequence of the monetar...
The graph below depicts an economy where a decline in aggregate demandes caused a recession. This...
The graph below depicts an economy where a decline in aggregate demandes caused a recession. This economy current level of real GDP (Y) is below its long-run equilibrium, which is illustrated by the long run aggregate supply curve LRASL and price level P. below the equilibrium value of Without any fiscal policy, we expect the economy to eventually return to full employment on its own. Use the graph below to the Instructions: Use the tool provided to plot New Curve...
What action can the Federal Reserve take to reduce unemployment? Using one of the tools available...
What action can the Federal Reserve take to reduce unemployment? Using one of the tools available to the Federal Reserve, explain how the Fed would accomplish the action you listed. Assume the economy is currently operating at the natural rate of unemployment, what affects will the action you listed in response to have in the short run on output, price level, and interest rates? Please use the AS/AD and Money Market diagrams to illustrate your answer. Again, assume the economy is...
Assume that the United States economy is currently in a recession in a short-run equilibrium. (a)...
Assume that the United States economy is currently in a recession in a short-run equilibrium. (a) Draw a correctly labeled graph of the short-run and long-run Phillips curves. Use the letter A lo label il point that could represent the current state of the economy in recession. (b) Draw a correctly labeled graph of aggregate demand and aggregate supply in the recession and show cach of the following. (i) The long-run equilibrium output, labeled Y (11) The current equilibrium output...
AD-AS and Phillip Curve Model, Money Market and Banking System Graphically illustrate an economy in the...
AD-AS and Phillip Curve Model, Money Market and Banking System Graphically illustrate an economy in the long run equilibrium, producing at the full employment level of production. Indicate the equilibrium Price level (P*) and the level of real GDP (Y*) Graphically illustrate an economy in the short run equilibrium producing at a below full employment level of production. Indicate the equilibrium Price level (P*) and the level of real GDP (Y*) and show the amount of the recessionary gap. Graphically...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The economy's current level of real GDP (Y) is above its long-run equilibrium. This is illustrated by the long-run aggregate supply curve (LRAS) and a price level 2) above the equilibrium value of Pe Fiscal Policy Price Level Real GDP Which of the following is an example of an automatic stabilizer that would help this economy move toward full employment again A reduced need for...
1. What is on the horizontal axis and the vertical axis of the AD-AS graph? Or...
1. What is on the horizontal axis and the vertical axis of the AD-AS graph? Or explain what Y and P are, and how they are measured. 2. What is the major difference between the AE model and the AD-AS model? 3. Suppose a recession is characterized by a decrease in real GDP and a decrease in the price level. What could be the cause of the recession? 4. Suppose a recession is characterized by a decrease in real GDP...
1. The economy of Maxistan is currently in a recession. Show the current short-run equilibrium in a correctly lab...
1. The economy of Maxistan is currently in a recession. Show the current short-run equilibrium in a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long run aggregate supply curves. Let Y1 represent current output, Yf represent full employment output, and PL1 represent the current price level. 2. Suppose interest rates are lowered. Show the effect this will have on the economy of Maxistan in your graph. Let Y2 represent the new output and PL2 represent the...
3.18 A massive decrease in aggregate demand plunges the U.S. economy into a recession and unemployment rates soar to 10%. According to the classical model of macroeconomic equilibrium the economy will stagnate in a recession unless measures are taken to increase aggregate demand nominal wages will decline increasing aggregate supply until full employment is restored nominal wages will remain fixed the aggregate supply curves will shift inward making the recession worse the price level will not decline Key Concepts: Classical...
Suppose the economy is currently in short run macroeconomic equilibrium at a real GDP level of $14 trillion. The full employment level of output is $12 trillion. What could the government do to avoid a demand pull inflation situation? Your answer must be specific in giving all of the actions that could taken by the government and what impact these actions would have on the aggregate demand/supply model to avoid the demand-pull inflation situation. D oo - FormatVBI U -
the economy is experiencing a recession and high unemployment a. Use an AD-AS model together with the Fed Funds market to represent ther short ran equilibrium in b. What types of monetary policy (i.e.. expansionary or restrictive) should the Fed implement? c. In implementing the policy you suggest. which actions (please give at least two actions) should the Fed take to achieve this policy? Explain how t he y policy would address this problem and the consequence of the monetar...
The graph below depicts an economy where a decline in aggregate demandes caused a recession. This economy current level of real GDP (Y) is below its long-run equilibrium, which is illustrated by the long run aggregate supply curve LRASL and price level P. below the equilibrium value of Without any fiscal policy, we expect the economy to eventually return to full employment on its own. Use the graph below to the Instructions: Use the tool provided to plot New Curve...
Assume that the United States economy is currently in a recession in a short-run equilibrium. (a) Draw a correctly labeled graph of the short-run and long-run Phillips curves. Use the letter A lo label il point that could represent the current state of the economy in recession. (b) Draw a correctly labeled graph of aggregate demand and aggregate supply in the recession and show cach of the following. (i) The long-run equilibrium output, labeled Y (11) The current equilibrium output...
The graph below depicts an economy where an increase in aggregate demand has caused inflation. The economy's current level of real GDP (Y) is above its long-run equilibrium. This is illustrated by the long-run aggregate supply curve (LRAS) and a price level 2) above the equilibrium value of Pe Fiscal Policy Price Level Real GDP Which of the following is an example of an automatic stabilizer that would help this economy move toward full employment again A reduced need for...
1. What is on the horizontal axis and the vertical axis of the AD-AS graph? Or explain what Y and P are, and how they are measured. 2. What is the major difference between the AE model and the AD-AS model? 3. Suppose a recession is characterized by a decrease in real GDP and a decrease in the price level. What could be the cause of the recession? 4. Suppose a recession is characterized by a decrease in real GDP...
1. The economy of Maxistan is currently in a recession. Show the current short-run equilibrium in a correctly labeled graph of the aggregate demand, short-run aggregate supply, and long run aggregate supply curves. Let Y1 represent current output, Yf represent full employment output, and PL1 represent the current price level. 2. Suppose interest rates are lowered. Show the effect this will have on the economy of Maxistan in your graph. Let Y2 represent the new output and PL2 represent the...
Most questions answered within 3 hours.
-
A grammar is a 4-tuple G, G = (Ν, Σ, Π, Σ, S) where, Ν is...
asked 27 minutes ago -
In this part, calculate the present values. Use the Excel PV
function to compute the present...
asked 26 minutes ago -
Part 1. Primitive Types, Sorting, Recursion for
Homework.java
a) Implement the static method initializeArray that receives...
asked 1 hour ago -
Using C++, build a sorter that can rank a sequence of numbers in
a descending order....
asked 1 hour ago -
Derive ground state term symbols. Use notation 2S(1/2) for state
2S1/2
a) d5
b) f3
c)...
asked 1 hour ago -
A sample of size 31 will be drawn from a population with mean 39
and standard...
asked 2 hours ago -
What is the effect on the P-value when a test is changed from a
two-tailed hypothesis...
asked 2 hours ago -
I wish to estimate µ, the mean of a population. After I collect
and an-
alyze...
asked 3 hours ago -
At a local university, you poll a group of 115 students and find
that 37 of...
asked 2 hours ago -
Gladstone company tracks the number of units purchased and sold
throughout each accounting period but applies...
asked 2 hours ago -
When determining if a molecule's configuration is E or Z, what
determines the higher priority groups?
asked 2 hours ago -
13. What is the amount
of conversion cost transferred to finished goods? (Round
your intermediate calculations...
asked 2 hours ago