Why is it beneficial (sometimes) to use economic policy in the short-run? Question 10 options: Because...
Why is it beneficial (sometimes) to use economic policy in the short-run?
Question 10 options:
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Because it can reduce unemployment when y>y* in the short-run |
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Because it can reduce unemployment when u<u* |
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Because it can prevent inflation when y<y* in the short-run |
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Because the economy can't get to the long-run equilibrium unless policy is used. |
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Because it can prevent inflation when y>y* in the short-run |
Homework Answers
Price level(p) is higher than expected price level(p*) when actual output (y) is greater than potential output (y*).Economic policy can reduce aggregate demand so that y*=y and p=p*,so that rate of inflation is reduced.
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Why is it beneficial (sometimes) to use economic policy in the
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Question 10 options:
Because...
Economics: 1) Why is it possible to change real economic factors in the short run simply...
Economics: 1) Why is it possible to change real economic factors in the short run simply by printing and distributing more money? 2) Explain why a stable 5% inflation rate can be preferable to one that averages 4% but varies between 1-7% regularly. 3) Explain the difference between active and passive monetary policy. 4) Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%, Now assume that the central bank unexpectedly...
a. Use the AD-AS model to derive the short run Phillips curve and show how policy...
a. Use the AD-AS model to derive the short run Phillips curve and show how policy can move the economy from a point with high inflation to appoint with low inflation. b. Use the AD-AS model to derive the long-run Phillips curve and show the short run and long run effect of a policy that has the goal of reducing the unemployment rate
2. Phillips Curve. An economy has the following functions for its short run aggregate supply (SRAS),...
2. Phillips Curve. An economy has the following functions for its short run aggregate supply (SRAS), Okun's Law (OL), and Phillips Curve (PC): SRAS: P = EP + (1/2)(y - 3) OL: (Y-Y) = -4(u-u") PC:T = ET - (1/5)( - 6) The economy begins at its natural rate of output with a stable price level equal to $5. a.) Output is at its natural level when the price level is equal to expectations. Calculate the natural rate of output...
Suppose the economy starts out in a long-run equilibrium at potential GDP.. Draw the economy’s short-run...
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QUESTION 6 Some political parties consider only short run economic effects and therefore make election promises...
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drop down options are as follows: 1. (lower/higher) 2. (lower/higher) 3. (short-run/long-run) 4.(raising/lowering) 5.(late1990s/1960s/early1980s/1970s) The drop...
drop down options are as
follows: 1. (lower/higher) 2. (lower/higher) 3.
(short-run/long-run) 4.(raising/lowering)
5.(late1990s/1960s/early1980s/1970s)
The drop down options are as follows: 1. (down/up) 2.
(higher/lower) 3. (down/up) 4. (rise/remain unchanged/fall)
please help solve these, there was no graphs provided and the
questions are complete.
An article in the Economist started by stating "That central banks cannot endlessly reduce unemployment without sparking inflation is economic gospel. It follows from 'a substantial body of theory, informed by considerable historical evidence,' according to...
2. Explain how will each of these affect the economy in the short run and the...
2. Explain how will each of these affect the economy in the short run and the long run (in terms of output, unemployment and inflation) a. Government decides to take policy to reduce deficit. b. Construction workers goes on a strike for 2 months. c. US dollar depreciates with respect to euro d. People become more optimistic about the economy e. Productivity of U. S workers increase due to technological advancement
QUESTION 7 (25 points): Economic Fluctuation using AD-AS framework Suppose that the short-run aggregate supply curve...
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Some political parties consider only short run economic effects and therefore make election promises of increased...
Some political parties consider only short run economic effects and therefore make election promises of increased government spending. (a) Use the AD and AS diagram to explain the short run impact on economic growth and employment. [3 marks] (b) Use a Phillips Curve diagram to explain why such policies could be damaging for the economy in the short run. [3 marks] (c) Use the AD-AS diagram along with the long run Phillips curve diagram to comment on the long run...
Question 4 2 pts According to the short-run Philliips curve, a more expansionary monetary policy that...
Question 4 2 pts According to the short-run Philliips curve, a more expansionary monetary policy that increases inflation will also: o reduce unemployment lower interest rates increase unemployment o have no effect on unemployment lead to higher GDP/capita
2. Phillips Curve. An economy has the following functions for its short run aggregate supply (SRAS), Okun's Law (OL), and Phillips Curve (PC): SRAS: P = EP + (1/2)(y - 3) OL: (Y-Y) = -4(u-u") PC:T = ET - (1/5)( - 6) The economy begins at its natural rate of output with a stable price level equal to $5. a.) Output is at its natural level when the price level is equal to expectations. Calculate the natural rate of output...
drop down options are as
follows: 1. (lower/higher) 2. (lower/higher) 3.
(short-run/long-run) 4.(raising/lowering)
5.(late1990s/1960s/early1980s/1970s)
The drop down options are as follows: 1. (down/up) 2.
(higher/lower) 3. (down/up) 4. (rise/remain unchanged/fall)
please help solve these, there was no graphs provided and the
questions are complete.
An article in the Economist started by stating "That central banks cannot endlessly reduce unemployment without sparking inflation is economic gospel. It follows from 'a substantial body of theory, informed by considerable historical evidence,' according to...
QUESTION 7 (25 points): Economic Fluctuation using AD-AS framework Suppose that the short-run aggregate supply curve has a positive slope and that the economy starts at a long-run equilibrium. Now imagine that 10 million people move to Australia they found that Australians live an average of 10 extra years due to the relax lifestyle that they enjoy. This is a permanent change in Labor in the U.S. economy. (a) (10 points) No Policy Intervention: Using the model of Aggregate Demand...
Question 4 2 pts According to the short-run Philliips curve, a more expansionary monetary policy that increases inflation will also: o reduce unemployment lower interest rates increase unemployment o have no effect on unemployment lead to higher GDP/capita
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