Using the ZZ-Y model to illustrate the effects of a reduction in consumer confidence on the...
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Using the ZZ-Y model to illustrate the effects of a reduction in
consumer confidence on the...
[ Draw the diagram please] Using the ZZ/Y and NX graphs, illustrate graphically and explain what...
[ Draw the diagram please] Using the ZZ/Y and NX graphs, illustrate graphically and explain what effect a reduction in foreign output (Y*) will have on output, exports, imports, and net exports. Clearly label all curves and clearly label the initial and final equilibria.
Using the urban model, illustrate and explain how a reduction in population and a reduction in...
Using the urban model, illustrate and explain how a reduction in population and a reduction in land rent will affect city size and structure.
Using the WS-PS model, graphically explain the effects of a reduction in the markup on the...
Using the WS-PS model, graphically explain the effects of a reduction in the markup on the equilibrium real wage, the natural rate of unemployment, the natural level of employment, and the natural level of output. Answer: A reduction in the markup will cause firms to [Select] the price given the nominal wage This will cause the real wage based on the price setting behavior to [Select] ; this is represented by a(n) [Select] shift in the [Select] curve. As a...
Use the IS/LM/PC model diagram to illustrate how a reduction in the oil price might affect...
Use the IS/LM/PC model diagram to illustrate how a reduction in the oil price might affect the economy in the short and medium term. For simplicity assume that the economy was initially in equilibrium.
1. Explain how consumer pessimism (or loss of consumer confidence) may affect AD and the macro...
1. Explain how consumer pessimism (or loss of consumer confidence) may affect AD and the macro equilibrium viz., the equilibrium value of each of the macro variables in the tables below, in both the long and short runs. 2. Apparently both investor pessimism and consumer pessimism would affect the macro- economy via a reduction in aggregate demand. Explain whether and why (a) there are any difference at all in their effects on prices and quantities in the various (incl. labor,...
3. Suppose the economy originally operates at medium run equilibrium. Now, consumer confidence su...
3. Suppose the economy originally operates at medium run equilibrium. Now, consumer confidence suddenly increased. a) In ISLM and ADAS diagrams, show the effect of the increase in consumer confidence in the short run and in the medium run, on output, nominal interest rate, and price level. Briefly explain the shift of curves. b) Based on your answer in (a), explain what happens to private savings in the short run. (Hint: S=Y-T-C=Y-T-c0-c1(Y-T)= -c0+(1-c1)(Y-T) ) c) What happens to private savings...
For each of the following situations, use the IS-LM-FX model to illustrate the effects of the...
For each of the following situations, use the IS-LM-FX model to illustrate the effects of the shock. For each case, state the effect of the shock (increase, decrease, no change, or ambiguous) on the following variables: Y, i, E, C, I, TB. Assume the government allows the exchange rate to float. a. Lump-sum taxes increase. b. Foreign income increases. c. Investors expect an appreciation of the home currency d. The money supply decreases.
5. The recent financial crisis has led to a decline in the consumer confidence. Explain how...
5. The recent financial crisis has led to a decline in the consumer confidence. Explain how it affects short and long run equilibrium using the IS-LM and AD-AS diagram for a closed economy.
5. The recent financial crisis has led to a decline in the consumer confidence. Explain how it affects short and long run equilibrium using the IS-LM and AD-AS diagram for a closed economy.
Suppose the economy is operating at full potential in the following IS-LM-PC model: C 200+0.25*Y ...
Suppose the economy is operating at full potential in the following IS-LM-PC model: C 200+0.25*Y I-150 0.25*Y-1000 i G = 150 T-200 i-0.05 a) Solve for the equilibrium level of output. What is the level of potential output? b) Solve for the equilibrium values of C and I c) Suppose in period t+1 there is an increase in consumer confidence to 0.5 and an increase in taxes to 300. Solve for the new equilibrium levels of Y, C and I...
It is customary for the News media to report about consumer confidence and investor confidence while...
It is customary for the News media to report about consumer confidence and investor confidence while discussing the national economy. How do you think the confidence of the economic agents affect the economy? From personal or work experience, state factors that could cause increase in consumer spending and investor investment. Do consumer and investor confidence trend reports affect your spending pattern? Explain. The government purchases component of GDP does not include spending on transfer payments such as Social Security. GDP...
Using the WS-PS model, graphically explain the effects of a reduction in the markup on the equilibrium real wage, the natural rate of unemployment, the natural level of employment, and the natural level of output. Answer: A reduction in the markup will cause firms to [Select] the price given the nominal wage This will cause the real wage based on the price setting behavior to [Select] ; this is represented by a(n) [Select] shift in the [Select] curve. As a...
For each of the following situations, use the IS-LM-FX model to illustrate the effects of the shock. For each case, state the effect of the shock (increase, decrease, no change, or ambiguous) on the following variables: Y, i, E, C, I, TB. Assume the government allows the exchange rate to float. a. Lump-sum taxes increase. b. Foreign income increases. c. Investors expect an appreciation of the home currency d. The money supply decreases.
5. The recent financial crisis has led to a decline in the consumer confidence. Explain how it affects short and long run equilibrium using the IS-LM and AD-AS diagram for a closed economy.
5. The recent financial crisis has led to a decline in the consumer confidence. Explain how it affects short and long run equilibrium using the IS-LM and AD-AS diagram for a closed economy.
Suppose the economy is operating at full potential in the following IS-LM-PC model: C 200+0.25*Y I-150 0.25*Y-1000 i G = 150 T-200 i-0.05 a) Solve for the equilibrium level of output. What is the level of potential output? b) Solve for the equilibrium values of C and I c) Suppose in period t+1 there is an increase in consumer confidence to 0.5 and an increase in taxes to 300. Solve for the new equilibrium levels of Y, C and I...
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