Homework Answers
Spending growth rate = 12%
Real GDP growth rate = 5% (solow growth rate)
Inflation Rate = Spending growth rate - real gdp growth rate.
Inflation Rate = 12% - 5%
Inflation rate = 7%
Answer: Option (b)
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Inflation rate, Solow growth curve ut of 2.0 AD (M+V = 12%) 12% Real GDP growth rate Refer to the AD/AS graph 5 abo...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what...
on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
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Investment Demand 0 $75 150 225 Investment (s) 0 $50 100 150 Investment (S) AS $150) AD, (I-$100) Real GDP Refer to the graphs above, in which the numbers in parentheses near the AD1, AD2, and A...
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QUESTION 12 Suppose that Japan’s Central Bank announces it wants to target an inflation rate of...
QUESTION 12
Suppose that Japan’s Central Bank announces it wants to target
an inflation rate of at least 2%, and that real GDP growth in the
economy is 1%. Assume that velocity is constant. Then money growth
must be at least
4%
2%
None of the above/below
3%
1%
QUESTION 13
Suppose we construct the CPI and the GDP deflator using the same
type of goods. Which of the following is true:
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on 7 According to the AD/AS model, a sudden decrease in business confidence would cause what to happen in the short run? et red Select one: out of 2.0 a. the real growth rate to increase and the inflation rate to rise b. the real growth rate to decrease and the inflation rate to fall on C the real growth rate to increase and the inflation rate to fall d. the real growth rate to decrease and the inflation rate...
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Figure 4 nflation Rate Dynamic AS Dynamic AD Real GDP Growth In figure 4, in the long run we would expect aggregate supply to be: Figure 4 Final Eco 216.pdf 8 KB A. horizontal B. vertical C. positively sloped D. negatively sloped E. negatively sloped Reset Selection In figure 4, if dynamic AD decreases, then in the short run real GDP growth: Figure 4 Final Eco 216.pdf 8 KB A. and inflation increase B. and inflation decrease C. rises and...
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Consider the Solow growth model with depreciation rate and population growth rate n. The equation of motion for the capital stock and the per worker production function in this economy are given by: Ak= s(f(k) - (8 + n) k y= f(k) = k1/4 a). Suppose adoption of modern birth control methods in a developing country causes the population growth rate to decrease. What happens in the main Solow diagram: what curve(s) shin, what happens to the steady- state level...
1. The economy is experiencing high unemployment and a low rate of economic growth and the Bank of Canada decides to pursue an expansionary monetary policy. Which action by the Bank of Canada would be most consistent with this policy? 4. If the money GDP is S600 billion and, on the average, ench dollar is spent three times per year, then the amount of money demanded for transactions purposes: will be $1800 billion. buying government securities will be 5600 billion...
Suppose that workers and firms perfectly forecast inflation, so that the real wage remains unchanged as the price level rises over time. Prices and wages rise at the same rate, which implies that the real wage stays constant. The following graph shows the aggregate demand curve (AD) in an economy in long-run equilibrium. Assume the natural rate of unemployment is 6%, and potential output is $50 trillion. Use the orange points (square symbol) to draw the aggregate supply curve in...
46. In the AD-AS model, an unexpected decrease in the growth rate of the money supply causes: A) a rightward shift of the AD curve and then a leftward shift of the SRAS curve. B) a rightward shift of the AD curve and then a rightward shift of the SRAS curve. C) a leftward shift of the AD curve and then a leftward shift of the SRAS curve. D) a leftward shift of the AD curve and then a rightward...
QUESTION 12
Suppose that Japan’s Central Bank announces it wants to target
an inflation rate of at least 2%, and that real GDP growth in the
economy is 1%. Assume that velocity is constant. Then money growth
must be at least
4%
2%
None of the above/below
3%
1%
QUESTION 13
Suppose we construct the CPI and the GDP deflator using the same
type of goods. Which of the following is true:
The CPI and GDP deflator may both overstate...
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