Homework Answers
a) The classical model indicates that the equilibrium market interest rate and savings in the market are equal. The answer is "C".
b) "C"
As per the classical economists the aggregate demand will not fall and as per the keynesian it will bring the hole equilibrium down. The answer is "C".
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queation 4&5 QUESTION 4 The classical model indicates that at the equilibrium interest rate, Saving is less than...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium interest rate in the goods market, then total demand for goods is A. higher than the total supply. B. lower than total supply. C. can be equal to total supply. D. none of the above. QUESTION 21 In the classical model, if total demand for goods is less than total supply, then real interest rate will A. fall. B. rise. C. may remain the...
For each macroeconomic viewpoint, identify whether it is a position held by classical economists, Keynesian economists,...
For each macroeconomic viewpoint, identify whether it is a position held by classical economists, Keynesian economists, or monetarists. If the viewpoint is shared by more than one group, check all that apply. Viewpoints Expansionary fiscal policy is either an unnecessary or ineffective response to a situation where output is below full employment. A decrease in aggregate demand will lead to only a temporary departure from full employment output. Because prices and wages are flexible, the economy will automatically adjust to...
of a closed economy. when 6. According to the classical long-run macroeconomic model of a co...
of a closed economy. when 6. According to the classical long-run macroeconomic model of a co decrease and government spending is unchanged a consumption and investment both increase b. consumption and investment both decrease c consumption increases and investment decreases d. consumption decreases and investment increases. 7. Suppose a business-friendly billionaire becomes president. As a result, businesses become optimistic about the future and more eager than before to increase their investment spending According to the classical long-run macroeconomic model of...
If at some specific interest rate the quantity of money demanded is less than the quantity...
If at some specific interest rate the quantity of money demanded is less than the quantity of money supplied, people will desire to buy interest-earning assets causing the interest rate to decrease. Select one: True False In recent years, the Fed has conducted policy by setting a target for the federal funds rate. Select one: True False A decrease in taxes is an expansionary fiscal policy designed to increase aggregate demand and reduce unemployment. Select one: True False If aggregate...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in the economy is the: a. level of investment. c. level of prices. b. level of income. d. interest rate. 2. If a family's MPC is. 7, it is: a. spending 70 percent of its income on consumer goods. b. necessarily dissaving. c. spending seventenths of any increment to its income d. operating at the breakeven point. The size of the MPC is assumed to...
1. Which of the following is not a property of the aggregate demand curve? It shows...
1. Which of the following is not a property of the aggregate demand curve? It shows the relationship between the overall price level and level consumption. It shows the price level on the vertical axis and output on the horizontal axis. The aggregate demand curve slopes downward. It shows the relationship between the overall price level and the level of total demand. 2. When the price level increases people: feel more wealthy. have the same real value of assets, regardless...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0...
9. Refer to the Figure13-2. If the economy were initially in equilibrium at r0 and E0 and the government removed import quotas, what would happen to the exchange rate? a. It would appreciate to E1. b. It would appreciate to E2. c. It would depreciate to E1. d. It would depreciate to E2. ____ 10. When a country experiences capital flight, which of the following best explains the effects? a. The interest rate falls because the demand for loanable funds shifts left....
Q1, and 4. Please explain in detail about the answer, please use a graph, explain and...
Q1, and 4. Please explain in detail about the answer, please use
a graph, explain and interpret the graph if needed. Thank you
1. If the velocity of money were to increase but the money supply stayed the same, we definitely would see a. a decrease in nominal GDP. rightward shift in Aggregate Supply. b. a c. a decrease in real GDP d. a rightward shift in Aggregate Demand. e. deflation. 2. If a country increases its money supply by...
QUESTION 25 Which of the following best describes the long run in terms of aggregate supply?...
QUESTION 25 Which of the following best describes the long run in terms of aggregate supply? a. The long-run aggregate supply curve is horizontal. b. The long-run aggregate supply slopes upwards, but is NOT vertical. c. The long-run aggregate supply slopes downwards. d. The long-run aggregate supply curve is vertical. Question 39 Which of the following best characterizes market equilibrium? a. when there is no incentive for consumers or producers to change their current behaviour b. when producers earn profits...
Generally, when economists talk of the interest rate what are they talking about? For the CPI,...
Generally, when economists talk of the interest rate what are
they talking about?
For the CPI, what is the base year? a. It is the year the CPI first appeared. O b. It is the benchmark against which other years are compared, and it changes each year. O c. It is the year prior to the year for which the CPI is calculated. O d. It is the benchmark against which other years are compared, and it changes occasionally. Price...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium interest rate in the goods market, then total demand for goods is A. higher than the total supply. B. lower than total supply. C. can be equal to total supply. D. none of the above. QUESTION 21 In the classical model, if total demand for goods is less than total supply, then real interest rate will A. fall. B. rise. C. may remain the...
For each macroeconomic viewpoint, identify whether it is a position held by classical economists, Keynesian economists, or monetarists. If the viewpoint is shared by more than one group, check all that apply. Viewpoints Expansionary fiscal policy is either an unnecessary or ineffective response to a situation where output is below full employment. A decrease in aggregate demand will lead to only a temporary departure from full employment output. Because prices and wages are flexible, the economy will automatically adjust to...
of a closed economy. when 6. According to the classical long-run macroeconomic model of a co decrease and government spending is unchanged a consumption and investment both increase b. consumption and investment both decrease c consumption increases and investment decreases d. consumption decreases and investment increases. 7. Suppose a business-friendly billionaire becomes president. As a result, businesses become optimistic about the future and more eager than before to increase their investment spending According to the classical long-run macroeconomic model of...
1. According to Keynesian theory, the primary determinant of the level of consumption and saving in the economy is the: a. level of investment. c. level of prices. b. level of income. d. interest rate. 2. If a family's MPC is. 7, it is: a. spending 70 percent of its income on consumer goods. b. necessarily dissaving. c. spending seventenths of any increment to its income d. operating at the breakeven point. The size of the MPC is assumed to...
Q1, and 4. Please explain in detail about the answer, please use
a graph, explain and interpret the graph if needed. Thank you
1. If the velocity of money were to increase but the money supply stayed the same, we definitely would see a. a decrease in nominal GDP. rightward shift in Aggregate Supply. b. a c. a decrease in real GDP d. a rightward shift in Aggregate Demand. e. deflation. 2. If a country increases its money supply by...
Generally, when economists talk of the interest rate what are
they talking about?
For the CPI, what is the base year? a. It is the year the CPI first appeared. O b. It is the benchmark against which other years are compared, and it changes each year. O c. It is the year prior to the year for which the CPI is calculated. O d. It is the benchmark against which other years are compared, and it changes occasionally. Price...
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