Homework Answers
Second option is correct because if there is the monetary expansion, aggregate demand will shift to the right, and the new equilibrium point will be 'c'. At this level there is an increase in the price level as well as the real GDP.
First option is correct. Money multiplier is 1 / 20% which is 5 and increase in money supply is 5 x 100000 = 500,000.
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Done Chapter 13: Homework Probiems (Figure: Shits in SRAS and AD) If the economy is at...
Chapter 9 Part 2: Homework Problems Done 9. (Figure: Determining SRAS Shifts 2) Aggregate Output (Q)...
Chapter 9 Part 2: Homework Problems Done 9. (Figure: Determining SRAS Shifts 2) Aggregate Output (Q) Which of the following might cause a change in short-run aggregate supply? Unions successfully negotiate higher wages. Consumer incomes decrease. Businesses are increasingly optimistic about the future. Taxes on businesses increase. Start: 4:2S PM Aggregate Price Level (P) Done Chapter 9 Part 2: Homework Problems 11. (Figure: Shifting SRAS and AD) 200 180 SRAS 160 140 120 AD2 100 80 a 6아- AD 40아-...
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy....
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy. Suppose that in 2003, the economy is in macroeconomic equilibrium, with GDP at GDP (year 1). The Fed projects that in 2004, the aggregate demand curve will be AD (year 2), that potential real GDP will be $12.45 trillion (GDP (year 2), and that actual real GDP will be $12.39 trillion LRAS (year 1) LRAS (year 2) SRAS (ycar1) SRAS (year 2 ear Year...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output...
1. What occurs during a negative demand shock? Output increases and the price level decreases. Output and price level decrease. Output and price level increase. Output decreases and the price level increases. 2. In the equation of exchange, the term P × Q is the same as: the money supply. nominal GDP. national income. real GDP. 3. Expansionary monetary policy shifts the _____ curve to the _____. AD; right SRAS; left SRAS; right AD; left 4. The Taylor rule suggests...
O For each shock identified below, Shift the AD curve, the SRAS Curve, or both to...
O For each shock identified below, Shift the AD curve, the SRAS Curve, or both to show its effects on aggregate demand and/or aggregate Supply then move Point o to the new short-run equilibrium to indicate the new Price Level P and output y. Assume the economy Starts out in a long-run equilibrium. decrease in the velocity a) An exogenous of money. b) An exogenous of oil. Increase in the Price Now consider how the goals of the Fed influence...
econ LRAS, SRAS, SRAS SRAS Pnce Level Real GDP per Year 12) Refer to the graph...
econ
LRAS, SRAS, SRAS SRAS Pnce Level Real GDP per Year 12) Refer to the graph above. At point E3, the economy is experiencing A) recessionary gap B) stagflation C) inflationary gap D) full economy 13) From the point in question 12, what needs to be done using Aggregate Supply to get back to full employment? A) Decrease government spending B) Fed. to sell government bonds C) Produce more petroleum D) Decrease laborers 14) From the point in question 12,...
Starting from the top drop down questions: 1. Fall / rise 2. 18% / 12% /...
Starting from the top drop down
questions:
1. Fall / rise
2. 18% / 12% / 3% / 9% / 6% / 15 %
3. increase / decrease
4. up / down
5. more / less
6. an increase / no change / a decrease
7. an increase / no change / a decrease
8. an increase / no change / a decrease
3. The Keynesian transmission mechanism Suppose the Federal Reserve shifts to an expansionary monetary policy by buying...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
1. GDP is _____ 11 trillion/ 16 trillion/ 10 trillion / 14 trillion /12 trillion 2. currently...
1. GDP is _____ 11
trillion/ 16 trillion/ 10 trillion / 14 trillion /12
trillion
2. currently _____ recessionary gap / inflationary
gap
3. of ______ 4 trillion / 1 trillion / 5 trillion / 2
trillion / 3 trillion
4. the Fed will ____ increase / decrease
5. which will _____ increase/ decrease
6. incentive to ____ increase / decrease
7. shifting the ____ AD / SRAS / LRAS
8. curve to the ____ left / right
9. relatively high...
Help with graph, fill in the blanks and drop downs.Drop Downs:1. more/less2. higher/lower...
Help with graph, fill in the blanks and drop downs.Drop Downs:1. more/less2. higher/lower3. (short-run change in output):no change/decrease/increase4. (long-run change in price level):same/lower/higher than/as initial expectations5. (long-run change in output):no change/decrease/increase4. The rational expectations model Suppose the U.S. economy is in equilibrium at a potential output of $10 trillion so that unemployment is at the natural rate. At the beginning of the year, the Federal Reserve announces that its monetary policy will aim to maintain output at potential output and sustain...
Which of the following are ways that the Federal Reserve influences the U.S. economy through its monetary policies?
3. How the Fed influences the money supply Which of the following are ways that the Federal Reserve influences the U.S. economy through its monetary policies? Check all that apply. O Using open-market operations to sell securities, the Fed can increase the money supply, thereby increasing interest rates and subsequently reducing the rate of inflation. O Using open-market operations to buy securities, the Fed can increase the money supply, thereby increasing interest rates, which would cause security prices to decrease. Using open-market operations to sell...
Chapter 9 Part 2: Homework Problems Done 9. (Figure: Determining SRAS Shifts 2) Aggregate Output (Q) Which of the following might cause a change in short-run aggregate supply? Unions successfully negotiate higher wages. Consumer incomes decrease. Businesses are increasingly optimistic about the future. Taxes on businesses increase. Start: 4:2S PM Aggregate Price Level (P) Done Chapter 9 Part 2: Homework Problems 11. (Figure: Shifting SRAS and AD) 200 180 SRAS 160 140 120 AD2 100 80 a 6아- AD 40아-...
The graph depicts a dynamic aggregate demand (AD) and aggregate supply (AS) model of the economy. Suppose that in 2003, the economy is in macroeconomic equilibrium, with GDP at GDP (year 1). The Fed projects that in 2004, the aggregate demand curve will be AD (year 2), that potential real GDP will be $12.45 trillion (GDP (year 2), and that actual real GDP will be $12.39 trillion LRAS (year 1) LRAS (year 2) SRAS (ycar1) SRAS (year 2 ear Year...
O For each shock identified below, Shift the AD curve, the SRAS Curve, or both to show its effects on aggregate demand and/or aggregate Supply then move Point o to the new short-run equilibrium to indicate the new Price Level P and output y. Assume the economy Starts out in a long-run equilibrium. decrease in the velocity a) An exogenous of money. b) An exogenous of oil. Increase in the Price Now consider how the goals of the Fed influence...
econ
LRAS, SRAS, SRAS SRAS Pnce Level Real GDP per Year 12) Refer to the graph above. At point E3, the economy is experiencing A) recessionary gap B) stagflation C) inflationary gap D) full economy 13) From the point in question 12, what needs to be done using Aggregate Supply to get back to full employment? A) Decrease government spending B) Fed. to sell government bonds C) Produce more petroleum D) Decrease laborers 14) From the point in question 12,...
Starting from the top drop down
questions:
1. Fall / rise
2. 18% / 12% / 3% / 9% / 6% / 15 %
3. increase / decrease
4. up / down
5. more / less
6. an increase / no change / a decrease
7. an increase / no change / a decrease
8. an increase / no change / a decrease
3. The Keynesian transmission mechanism Suppose the Federal Reserve shifts to an expansionary monetary policy by buying...
6. (Problem 6) An economy is facing the inflationary gap shown in the accompanying diagram. Aggregate price level LRAS SRAS Real GDP Potential —YpY output To eliminate the gap, should the central bank use expansionary or contractionary monetary policy? How will the interest rate, investment spending, consumer spending, real GDP, and the aggregate price level change as monetary policy closes the inflationary gap? The central bank can use contractionary monetary policy. The interest rate will rise, which would encourage a...
1. GDP is _____ 11
trillion/ 16 trillion/ 10 trillion / 14 trillion /12
trillion
2. currently _____ recessionary gap / inflationary
gap
3. of ______ 4 trillion / 1 trillion / 5 trillion / 2
trillion / 3 trillion
4. the Fed will ____ increase / decrease
5. which will _____ increase/ decrease
6. incentive to ____ increase / decrease
7. shifting the ____ AD / SRAS / LRAS
8. curve to the ____ left / right
9. relatively high...
Help with graph, fill in the blanks and drop downs.Drop Downs:1. more/less2. higher/lower3. (short-run change in output):no change/decrease/increase4. (long-run change in price level):same/lower/higher than/as initial expectations5. (long-run change in output):no change/decrease/increase4. The rational expectations model Suppose the U.S. economy is in equilibrium at a potential output of $10 trillion so that unemployment is at the natural rate. At the beginning of the year, the Federal Reserve announces that its monetary policy will aim to maintain output at potential output and sustain...
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