If a negative real shock occurred in the RBC model, and the central bank increases the...
- If a negative real shock occurred in the RBC model, and the central bank increases the money supply, what is the outcome? Will it have any effect on growth in the short run or long run?
Homework Answers
Add Answer to:
If a negative real shock occurred in the RBC model, and the central bank increases the...
Facing a negative aggregate demand shock, the central bank of Guatemala has chosen to increase the...
Facing a negative aggregate demand shock, the central bank of Guatemala has chosen to increase the money supply. In the RBC model we might expect?
We have discussed two models that describe the relationship between inflation and economic growth. Which of the followi...
We have discussed two models that describe the relationship between inflation and economic growth. Which of the following is a property of the New Keynesian Model but NOT the Real Business Cycle (RBC) Model? Monetary policy has no effect on long run economic growth Recessions can be caused by a fall in aggregate demand. Prices are fully flexible in both the short and long run. All the above are properties of the RBC model. None of the above are properties...
The long run aggregate supply curve is perfectly vertical to both the RBC and New keynesian...
The long run aggregate supply curve is perfectly vertical to both the RBC and New keynesian models of inflation and economic growth. this implies that a. inflation and long run supply and positively correlated b. sthe slope of the LRAS curve is negative c. there is no relationship between long run growth and inflation d. all of the possible choices are correct money neutrality implies that a. all the possible choices are correct b. increaes in the money supply have...
For a given level of inflation expectations, if the central bank increases the money supply growth...
For a given level of inflation expectations, if the central bank increases the money supply growth rate, then in the short run a. the Phillips curve shifts left b. the economy moves down along the short-run Phillips curve C. the economy moves up along the short-run Phillips curve. d. the Phillips curve shifts right.
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illust...
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
According to the quantity theory of money and the Fisher effect, if the central bank increases...
According to the quantity theory of money and the Fisher effect, if the central bank increases the rate of money growth, what will happen to the private saving, national saving, investment, the equilibrium real interest rate, and the equilibrium nominal interest rate?
A real shock is any shock that increases or decreases the growth rate of: real GDP....
A real shock is any shock that increases or decreases the growth rate of: real GDP. potential GDP. prices. O nominal GDP
"The money supply of an economy increases when the central bank simultaneously decreases the reserve requirement...
"The money supply of an economy increases when the central bank simultaneously decreases the reserve requirement and sells government bonds in open market." Explain whether this statement is true, false or uncertain. (6 marks) What should money growth rate be if real output grows 4% per year, velocity grows 2% per year, and the central bank targets inflation to be 2% per year? (4 marks) What is the inflation tax? Explain. (6 marks) Explain (with the aid of diagrams) whether...
Economics: Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the...
Economics: 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 increases the money supply by 6%. a. Illustrate the short-run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level, and the Unemployment Rate. Label all curves and axis for full credit.
32. The credibility of the central bank: a. promotes long-run growth. b. is irrelevant for controlling inflation. c...
32. The credibility of the central bank: a. promotes long-run growth. b. is irrelevant for controlling inflation. c. is crucial for controlling inflation and stabilizing output d. promotes sensible fiscal policy. e. implies low interest rates. 33. You are the head of the central bank and you want to maintain 2 percent long-run inflation, using the quantity theory of money. If the real GDP growth is 4 percent and velocity is constant, you suggest a: a. 6 percent interest rate...
For a given level of inflation expectations, if the central bank increases the money supply growth rate, then in the short run a. the Phillips curve shifts left b. the economy moves down along the short-run Phillips curve C. the economy moves up along the short-run Phillips curve. d. the Phillips curve shifts right.
2. Suppose the economy is in long-run equilibrium, with real GDP at $19 trillion and the unemployment rate at 5%. Now assume that the central bank unexpectedly decreases money supply by 6%. a) Illustrate the short-run effects of the monetary policy by using aggregate demand-aggregate supply model. Be sure to indicate the direction of change in real GDP, the price level and the unemployment rate. b) Illustrate the long-run effects of the monetary policy by using aggregate demand-aggregate supply model....
A real shock is any shock that increases or decreases the growth rate of: real GDP. potential GDP. prices. O nominal GDP
32. The credibility of the central bank: a. promotes long-run growth. b. is irrelevant for controlling inflation. c. is crucial for controlling inflation and stabilizing output d. promotes sensible fiscal policy. e. implies low interest rates. 33. You are the head of the central bank and you want to maintain 2 percent long-run inflation, using the quantity theory of money. If the real GDP growth is 4 percent and velocity is constant, you suggest a: a. 6 percent interest rate...
Most questions answered within 3 hours.
-
Hows does water affect the digestion of fats ?
asked 59 minutes ago -
A buffer that contains 0.41 M of a base, B and 0.21 M of its
conjugate...
asked 1 hour ago -
Pleaaaaaaaasssssse help me please please it's more important
:((((((((((((((((((((
CASE STUDY
Nissan Company
Nissan Motor Company,...
asked 1 hour ago -
Calculate the concentration of hydronium and hyroxide ions in 1)
2.0 mol/L HNO3 2) 0.5 mol/L...
asked 1 hour ago -
In a loop-the-loop ride a car goes around a vertical, circular
loop at a constant speed....
asked 1 hour ago -
50 grams each of water (18.015 g/mol) and ethylene glycol
(C2H6O2) (62.07 g/mol) are mixed. At...
asked 1 hour ago -
The life expectancy of sport utility vehicles follows a normal
distribution with a mean of 145.8...
asked 1 hour ago -
If an object with mass of 5 kg is pushed with a force of 552 N,...
asked 1 hour ago -
Suppose your program already has a list called nums, which
contains several numbers. Write a for...
asked 1 hour ago -
A spherical shell with a finite thickness just barely floats in
water. If the shell is...
asked 1 hour ago -
Explain in detail whether the following is true or false:
Total factor productivity will rise only...
asked 1 hour ago -
A firm pays a $2.50 dividend at the end of year one
(D1), has a stock...
asked 1 hour ago