In the MS/P -- L(Y,r) diagram, a shift to the right of L(Y,r) line -- with...
In the MS/P -- L(Y,r) diagram, a shift to the right of L(Y,r) line -- with an unchanged Y -- would cause? Group of answer choices a shift to the right of the IS curve and a shift to the right of the AD curve. a shift to the left of the LM curve but no change to the AD curve. a shift to the right of the LM curve and a shift to the right of the AD curve. a shift to the left of the LM curve and a shift to the left of the AD curve a shift to the left of the IS curve and a shift to the left of the AD curve
Homework Answers
D. a shift to the left of the IS curve and a shift to the left of the AD curve
(As money demand shifts right then it means that ineterst rate increases so investment decreases which shifts both IS and AD to the left because of a decrease in aggregate spending and aggregate demand.)
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In the MS/P -- L(Y,r) diagram, a shift to the right of L(Y,r)
line -- with...
A temporary adverse productivity shock would: A) shift the FE line to the right and leave...
A temporary adverse productivity shock would: A) shift the FE line to the right and leave the IS curve unchanged B) shift the FE line to the left and leave the IS curve unchanged C) shift the FE line to the left and the IS curve up D) have no effect on the FE line please explain!
If the Fed lowers the discount rate i) What happens in the L-M diagram (liquidity preference)?...
If the Fed lowers the discount rate i) What happens in the L-M diagram (liquidity preference)? a. L left c. M/P left b. L right d. M/P right ii. As a result which curve shifts in the IS-LM diagram? a. IS down c. LM down b. IS up d. LM up iii. And what happens tor and Y? a. Y 1,r1 c. Y vir 1 b.Y 1,r d. Y vir If consumer confidence increases i) Which curve shifts in the...
factors that shift the AD Curve include A) government purchases B) autonomous investment C) taxes D)...
factors that shift the AD Curve include A) government purchases B) autonomous investment C) taxes D) all of the above E) none of the above 33. If government cuts taxes A) after tax income should increase shifting AD to the left to a lower cu B) after tax income should increase shifting AD to the right to a higher eq output C) after tax income and the equilibrium level of output remain unchanged D) after tax income remains unchanged but...
Assume the Chilean economy can be described as follows: C=200+0.25Yd l=150+0.25Y-1000r G=250 T=200 (M/P)d= L(r, Y)...
Assume the Chilean economy can be described as follows: C=200+0.25Yd l=150+0.25Y-1000r G=250 T=200 (M/P)d= L(r, Y) = 2Y- 8000r Ms=1840 P=1 a) Derive the equation for the LM curve. ( 1 .5 mk) b) Determine the slope af the LM curve. (0.5 mark) c) Derive the equation for the IS curve (I.S mk) d) Determine the slope ofthe IS curve. (0.5 mk) c) Compute the quilibrium values of income (Y) and interest rate (R)? (2 marks) [) Calculate the value...
Which of the following would cause the aggregate demand curve to shift to the right? ...
Which of the following would cause the aggregate demand curve to shift to the right? Group of answer choices an appreciation of the American dollar an increase in real interest rates a decrease in the money supply an increase in purchases by the federal government
What might cause the Aggregate Demand curve to shift to the right? What does this mean...
What might cause the Aggregate Demand curve to shift to the right? What does this mean for the state of the economy? What might cause the Aggregate Demand curve to shift to the left? What does this mean for the state of the economy? Sometimes the Aggregate Supply curve is drawn as an upward sloping straight line--other times it is drawn initially flat, then upsloping, then very steep. How does the shape of the AS curve matter for the effect...
Consider the Mundel-Fleming small open economy model: Y=C(Y-T)+1(1) + G Y = F(K,L) (M/P) L(r+z® Y)...
Consider the Mundel-Fleming small open economy model: Y=C(Y-T)+1(1) + G Y = F(K,L) (M/P) L(r+z® Y) Goods Money C = 50+0.8(Y- T) M 3000 I = 200-20r r*=5 NX = 200-508 P = 3 G=T= 150 L(Y, r) Y - 30r 1- find the IS* equation (hint : y as a function of e) 2- find the LM* equation (hint, also relates y and maybe e) 3-draw the IS-LM curve I y 4- find the equilibrium interest rate (trick question!)...
In the AD–AS diagram, an increase in money supply growth causes: a shift of the aggregate...
In the AD–AS diagram, an increase in money supply growth causes: a shift of the aggregate demand curve to the left. a shift of the aggregate demand curve to the right. a downward movement along the aggregate demand curve. an upward movement along the aggregate demand curve.
OY 10. By referring to Figure 7-1, an increase in the money stock a shifts the...
OY 10. By referring to Figure 7-1, an increase in the money stock a shifts the LM schedule to the right from LMoto LM b shifts the LM schedule to the left from LMo to LM e leaves the LM curve unchanged at LM. d. shifts neither the IS nor the LM schedule. 11. Changes in all of the following shift the LM curve except a. the price level. b. income. c. the money supply. d. money demand. e. all...
Figure 4. On the left-hand graph, MS represents the supply of money and MD represents the...
Figure 4. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs. MS P - - - - - P ...... _I _fr Refer to Figure 4. A decrease in Y from Y1 to Y2 is explained as follows: The Federal Reserve increases the money supply, causing the money-demand curve to shift from MD1...
If the Fed lowers the discount rate i) What happens in the L-M diagram (liquidity preference)? a. L left c. M/P left b. L right d. M/P right ii. As a result which curve shifts in the IS-LM diagram? a. IS down c. LM down b. IS up d. LM up iii. And what happens tor and Y? a. Y 1,r1 c. Y vir 1 b.Y 1,r d. Y vir If consumer confidence increases i) Which curve shifts in the...
factors that shift the AD Curve include A) government purchases B) autonomous investment C) taxes D) all of the above E) none of the above 33. If government cuts taxes A) after tax income should increase shifting AD to the left to a lower cu B) after tax income should increase shifting AD to the right to a higher eq output C) after tax income and the equilibrium level of output remain unchanged D) after tax income remains unchanged but...
Consider the Mundel-Fleming small open economy model: Y=C(Y-T)+1(1) + G Y = F(K,L) (M/P) L(r+z® Y) Goods Money C = 50+0.8(Y- T) M 3000 I = 200-20r r*=5 NX = 200-508 P = 3 G=T= 150 L(Y, r) Y - 30r 1- find the IS* equation (hint : y as a function of e) 2- find the LM* equation (hint, also relates y and maybe e) 3-draw the IS-LM curve I y 4- find the equilibrium interest rate (trick question!)...
OY 10. By referring to Figure 7-1, an increase in the money stock a shifts the LM schedule to the right from LMoto LM b shifts the LM schedule to the left from LMo to LM e leaves the LM curve unchanged at LM. d. shifts neither the IS nor the LM schedule. 11. Changes in all of the following shift the LM curve except a. the price level. b. income. c. the money supply. d. money demand. e. all...
Figure 4. On the left-hand graph, MS represents the supply of money and MD represents the demand for money; on the right-hand graph, AD represents aggregate demand. The usual quantities are measured along the axes of both graphs. MS P - - - - - P ...... _I _fr Refer to Figure 4. A decrease in Y from Y1 to Y2 is explained as follows: The Federal Reserve increases the money supply, causing the money-demand curve to shift from MD1...
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