1. Suppose in an economy there is passed a new regulatory law that reduces the productivity of newly produced machines. As a result of the change
A.there will be an initial shortage of savings and equilibrium investment will fall |
B.there will be an initial surplus of savings and the equilibrium interest rate will rise |
C.the equilibrium interest rate will rise because machines are less efficient |
D.the equilibrium interest rate will fall and equilibrium savings will fall too |
Decrease in productivity will decrease the investment which will shift the IS curve downwards. This cayses interest rate to decrease and equilibrium savings will also fall. Answer is D.
1. Suppose in an economy there is passed a new regulatory law that reduces the productivity...
A closed economy can be described by the long-run classical model: Y = 2KαL1–α C = 18500 + 0.75(Y – T) – 800r I(r) = 11000 – 1200r Note: r represents the real interest rate and is measured in percentage points (for example, if we find r = 10, then r is interpreted as being equal to 10%). Keep your answer to 4 decimal places if needed. Assume that there are two factors of production, capital (K) and labour (L),...
9.What is Say’s Law and what do classical economists say about prices, wages, and interest rates? What are the three states of the economy in relating the real GDP to natural real GDP? In a recessionary gap, is there a surplus or a shortage of production? What does that imply about the labor market and how wages may change? Understand the differences between a recessionary gap, inflationary gap, and long run equilibrium. How is the physical production possibilities frontier (PPF)...
(1) Other things being equal, which of the following will increase aggregate expenditures? Group of answer choices An increase in domestic prices relative to foreign prices A decrease in the interest rate A decrease in real wealth An increase in income taxes A decrease in government purchases of goods and services (2) If the current unemployment rate is 5 percent and the natural unemployment rate is 6 percent, then the economy is Group of answer choices producing a level of...
Do all parts please. No explanation needed. Part 1: Most of the reduction in poverty rates since World War II occurred as a result of the 1996 welfare reforms. 1940s War On Poverty. 1960s War On Poverty. end of "welfare as we know it." Part 2 Policies focused on putting people to work by having them construct parks would be considered demand-side policies. monetary policies. supply-side policies. demand-side and supply-side policies. Part 3 A 15-year old that wants a job...
macoroeconomics
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1. When it comes to financial matters, the views of Aristotle can be stated as: a. usury is nature’s way of helping each other. b. the fact that money is barren makes it the ideal medium of exchange. c. charging interest is immoral because money is not productive. d. when you lend money, it grows more money. e. interest is too high if it can’t be paid back. 2. Since 2008, when the monetary base was about $800 billion,...
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Budgetary Policy and Economic Growth Errol D'Souza The share of capital expenditures in government expenditures has been slipping and the tax reforms have not yet improved the income...
macroeconomic
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8. If the price of coffee decreases, all else held coestant, the Law of Demand states that a firms will produce more coffee b. people will buy more coffee 9. If the price of coffee decreases, all else held constant, the Law of Supply states that a firms will produce more coffee b. people will buy more coffee e. firms will produce less coffee d people will buy more milk shakes c....
I need Summary of this Paper i dont need long summary i need
What methodology they used , what is the purpose of this paper and
some conclusions and contributes of this paper. I need this for my
Finishing Project so i need this ASAP please ( IN 1-2-3 HOURS
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SPECIAL ARTICLES tole of Monetary Policy C Rangarajan What should be the objectives of monetary policy? Does the objective of price stability conflict with the goal of achieving...
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