Initially real interest rates in the United States England and Japan are all equal at 5 percent Then the

Question

Initially, real interest rates in the United States, England, and Japan are all equal, at 5 percent. Then the

central banks alter their policies, so that the American interest rate rises to 6 percent, the Japanese rate falls to 4 percent, and the British rate stays at 5 percent.

a) How would you predict that capital flows among the three countries would change?

b) Using supply and demand curves, show how the exchange rates are likely to change.

c) How do you expect the balance of trade in the three countries to change?

d) What quantitative relationship would you expect between the change in the capital flow and the change in the trade balance in each country?

JAPAN
8 x2
Leftward Shift .
INCREASE IN EXCHANGE
RATE .
DX
Quantity demanded
* * decreases.
Quantity
AMERICA
Rightward
Shift.
R2
-Et
DECREASE IN EXCHANGE
RATE
DI OP 2
* x Quantity
Quantity
demanded…
Macroeconomics

1)We would expect which of the following to occur when the central bank conducts an open market purchase of

Question

1)We would expect which of the following to occur when the central bank conducts an open market purchase of

bonds?

Select one:

a. A decrease in reserves.

b. A decrease in the money multiplier.

c. An increase in reserves.

d. An increase in the money multiplier.

e. A decrease in central bank money.

2)Which of the following will occur when the central bank pursues expansionary monetary policy?

Select one:

a. A rightward shift in the money demand curve and a rightward shift in the money supply curve.

b. A leftward shift in the money demand curve and a rightward shift in the money supply curve.

c. A rightward shift in the money demand curve and a leftward shift in the money supply curve.

d. A leftward shift in the money demand curve and a leftward shift in the money supply curve.

e. None of the above.

3)An increase in the interest rate will cause:

Select one:

a. a decrease in the supply of central bank money.

b. a decrease in the demand for reserves.

c. a decrease in the demand for currency.

d. both A and C.

e. both B and C.

4)An increase in the budget deficit increasing the level of investment is known as:

Select one:

a. the crowding in of investment.

b. the crowding out of investment.

c. the crowding out of budget deficit.

d. the crowding out of output.

e. the crowding in of budget deficit.

5)A decrease in the reserve deposit ratio, θ, will most likely have which of the following effects?

Select one:

a. A rightward shift in the IS curve.

b. A leftward shift in the IS curve.

c. An upward shift in the LM curve.

d. A downward shift in the LM curve.

e. A downward shift in the IS curve and an upward shift in the LM curve.

Macroeconomics

If the U S government tried to raise the rate of national economic growth much higher than the growth rate of the

Question

If the U.S. government tried to raise the rate of national economic growth much higher than the growth rate of the

rest of the world’s economy, how would the international trade sector transmit inflationary pressures to the U.S. economy? If the rest of the world raised its growth rate to the high American level, would these inflationary pressures persist? Use supply and demand curves for the dollar to explain your answer. What do you conclude about the desirability of coordinating economic policies among trading partners?

Macroeconomics

1)Assume that investment does not depend on the interest rate A decrease in government spending will cause which

Question

1)Assume that investment does not depend on the interest rate. A decrease in government spending will cause which

of the following for this economy?

Select one:

a. An increase in output.

b. An increase in the interest rate.

c. A decrease in investment.

d. No change in investment.

e. An increase in investment.

2)An increase in the aggregate price level, P, will most likely have which of the following effects?

Select one:

a. A rightward shift in the IS curve.

b. A leftward shift in the IS curve.

c. An upward shift in the LM curve.

d. A downward shift in the LM curve.

e. A downward shift in the IS curve and an upward shift in the LM curve.

3)An increase in consumer confidence will likely have which of the following effects?

Select one:

a. A rightward shift in the IS curve.

b. A leftward shift in the IS curve.

c. An upward shift in the LM curve.

d. A downward shift in the LM curve.

e. A rightward shift in the IS curve and an upward shift in the LM curve.

4)For a closed economy, which of the following conditions must be satisfied for equilibrium to be maintained?

Select one:

a. Y = Z.

b. S = I.

c. X = Z.

d. G = T.

e. X = IM.

5)In the IS-LM model, an increase in the money supply will cause an increase in which of the following variables?

Select one:

a. Output.

b. Consumption.

c. Investment.

d. All of the above.

e. None of the above.

Macroeconomics

6 People had been expecting the price level to be 140 but it turns out to be 138 Johnson Family Restaurants

Question

6. People had been expecting the price level to be 140 but it turns out to be 138. Johnson Family Restaurants

increases the number of workers it employs. What could explain this?

a. both sticky price theory and sticky wage theory b. sticky price theory but not sticky wage theory

c. sticky wage theory but not sticky price theory

d. neither sticky wage theory nor sticky price theory

Macroeconomics

ECC1100 1 In country A Tim bought a car for $40 000 in 2018 This

Question

ECC1100

1.In country A, Tim bought a car for $40,000 in 2018. This

transaction would lead to a $40,000 increase in country A’s GDP in 2018.

(Explain whether you agree or disagree with the statement. Give TWO reasons.)

2.If the price of bread increases by 10%, you will be necessarily worse off. Explain whether you agree or disagree with the statement.

(What are the assumptions behind your arguments?)

3.Explain the effect of an increase in participation rate on unemployment rate.

Macroeconomics

4 Suppose that we have a standard Solow model with a CobbDouglas production function The central equation of

4. Suppose that we have a standard Solow model with a. Cobb—[buglas produc—
tion function. The central equation of the model is as follows: km 2 SAFE? + (l. – {guilt
Consumption per worker is given by: q=[1-5)Akf. {a} Solve for an expression for the steady state capital stock per worker. In
doing so1 assume that the level of productivity is fixed at some value A. {h} Use your answer on the previous part to solve for an expression for steady state consumption per worleer. {c} Use calculus to derive an expression for the a which maximizes steady state consumption per worker.
Macroeconomics

In the circular flow diagrama

profit flows from the product market to the firms.

b. revenue

Question

In the circular flow diagram

a. profit flows from the product market to the firms.

b. revenue

flows from the resource market to the households.

c. consumer spending flows from the product market to the households.

d. consumer spending flows from the product market to the firms.

e. consumer spending flows from households to the product market.

Macroeconomics

1 …

If NX falls $40 billion, the MPC is 8/11, and there is a multiplier effect (no crowding out and no

Question

1. If NX falls $40 billion, the MPC is 8/11, and there is a multiplier effect (no crowding out and no

investment accelerator), how much does aggregate change (direction and size)?

Macroeconomics

Changes in the quantity of money lead to real changes in the economy If this is the case why would the central

Question

Changes in the quantity of money lead to real changes in the economy. If this is the case, why would the central

bank ever stop increasing the money supply?

Possible Answers:

Although there is a short-run incentive to increase the money supply, these effects wear off in the long run as prices adjust and then drive up the value of money.

The government has rules in place on the maximum amount the money supply can be increased in a given fiscal year.

Although there is a short-run incentive to increase the money supply, these effects wear off in the long run as prices adjust and then drive down the value of money.

Increasing the money supply is not a politically popular action and may lead to leaders of the central bank not getting reelected.

The short-run benefits are outweighed by the short-run costs of increases in the money supply.

Macroeconomics

The table attached shows total amount to build the swimming pool average costs total labor costs

Question

The table attached shows total amount to build the swimming pool, average costs, total labor costs

and

average labor costs that vary depending on the number of employees you hire for your pool company.

1. How do I calculate the total value of the 3 people, how was the value calculated?

2. What is the total labor cost with 4 people in the pool, and explain the method for the calculation.

3. Analyze the relationship between average benefits and average costs by filling in the blanks in the following statement:

4. If a another team wants to build the pool, as long as their average benefit exceeds their average cost, then this results in ________ people being hired and a net benefit (total donations minus total labor costs) of ________?

5. What is the marginal benefit (in terms of extra donations) of the 2nd person?

6. How does the marginal cost of the 4th person will increase the total labor cost.

7. What’s the net benefit of hiring people for the pool is the largest?

Number of
Average Donations
Total Labor Costs
Average Labor
Employees
Total Donations
Costs
$30,000
$8,000
2
$42,426
$17,000
$17,321
$27,000
4
$60,000
$9,500
$13,416
$50,000
Macroeconomics

Consider the following economic data to answer #1013

Unemployment rate= 4%

Inflation rate=

Question

Consider the following economic data to answer #10-13.

Unemployment rate= 4%

Inflation rate=

2%

Actual GDP= $17 trillion

Growth rate= 2%

Potential GDP= $20 trillion

Marginal Propensity to consume=.7

Based on the data, answer the following:

(5) 10. What data indicate there is a problem and why?

(2) 11. How much and what kind of gap is this economy experiencing?

(3) 12. State a fiscal policy option to fix the problem. State a monetary policy option to fix the problem.

(5) 13. How much must spending change to close the gap? Show your calculations. (Hint: don’t forget the multiplier effect)

Macroeconomics

If there is a decrease in personal taxes the correct sequence of events is

a. a decrease in taxes

Question

If there is a decrease in personal taxes, the correct sequence of events is

a. a decrease in taxes

increases disposable income which increases consumer spending. The increase in consumer spending shifts AD to the right increasing output and price level.

b. a decrease in taxes increases disposable income which shifts AD to the right increasing output and decreasing price level.

c. a decrease in taxes shifts AD to the right increasing output and price level.

d. a decrease in taxes increases consumer spending which shifts AD to the right increasing output and price level.

e. a decrease in taxes increases disposable income which increases consumer spending. The increase in consumer spending shifts AD to the right increasing output and decreasing price level.

Macroeconomics

You recently bought

a $10,000 10
year US
government bond that guarantees you 2% interest per year

Question

You recently bought a $10,000 10 year US government bond that guarantees you 2% interest per year

for each of the next 10 years, after which you will receive your initial $10,000 back. If interest rates in the US increase as a result of a strong economy, what impact will this have, if any, on the market value of your bond?

Macroeconomics

2 • In the Keynesian cross model assume that the consumptionfunction is given

Question

2. • In the Keynesian cross model, assume that the consumption

function is given

by

C=120+0.8(Y−T).

Planned investment is 200; government purchases and taxes are both 400.

a. Graph planned expenditure as a function of income.

b. What is equilibrium income?

c. If government purchases increase to 420, what is the new equilibrium income?

What is the multiplier for government purchases?

d. What level of government purchases is needed to achieve an income of 2,400?

(Taxes remain at 400.)

e. What level of taxes is needed to achieve an income of 2,400? (Government

purchases remain at 400.)

Macroeconomics

You are given the following information

The labor force consists of
154,704

Question

You are given the following information:

The labor force consists of 154,704

adults

The number of employed adults within the labor force is 139,442

The number of adults not in the labor force is 82,624

What is the unemployment rate in this economy?

Macroeconomics

a)Assume that a society has two types of workers that lose jobs in a given year Society A has 2

Question

a)Assume that a society has two types of workers that lose jobs in a given year. Society A has 2

million workers losing their jobs; each person takes a year to find a new job. Society B has 24 million workers losing their jobs; each worker takes a month to find a new job. How many spells’ of unemployment occur each year in the economy? What percentage of the spells is only one month long?

b)If you take all the unemployed workers each year and multiply each by the length of the unemployment spell, how many worker months’ of unemployment would there be in the economy each year? Of all the worker months of unemployment, how many are accounted for by the workers unemployed one year at a time?

c)If the number of employed workers equals 325 million and the number of unemployed workers equals 75 million, what is the unemployment rate?

I do not understand what part of this question is in violation of the honor code. If you DO NOT want to answer it you don’t have too, but STOP flagging this question without telling me whats wrong with it. Thanks

Macroeconomics

Which country has the absolute

Question

. Which country has the absolute

advantage?

b. Which country has the comparative advantage?

c. Which country has a lower opportunity cost?

d. Which country has a higher opportunity cost?

e. What should the United States import?

f. What should Australia export?

g. What is the opportunity cost for the United States?

h. What is the opportunity cost for Australia?

SHOW ALL WORK!

Macroeconomics

Consider the economy of Hicksonia a The consumption function is given byC=300+0 6(Y−T) The

Question

Consider the economy of Hicksonia.

a. The consumption function is given by

C=300+0.6(Y−T).

The

investment function is

I=700−80r.

Government purchases and taxes are both 500. For this economy, graph the IS

curve for r ranging from 0 to 8.

b. The money demand function in Hicksonia is

(M/P)d=Y−200r.

The money supply M is 3,000, and the price level P is 3. Graph the LM curve for

r ranging from 0 to 8.

c. Find the equilibrium interest rate r and equilibrium income Y.

d. Suppose that government purchases are increased from 500 to 700. How does

the IS curve shift? What are the new equilibrium interest rate and income?

e. Suppose instead that the money supply is increased from 3,000 to 4,500. How

does the LM curve shift? What are the new equilibrium interest rate and

income?

f. With the initial values for monetary and fiscal policy, suppose the price level

rises from 3 to 5. What happens? What are the new equilibrium interest rate

and income?

g. For the initial value of monetary and fiscal policy, derive and graph an

equation for the aggregate demand curve. What happens to this aggregate

demand curve if fiscal or monetary policy changes, as in parts (d) and (e)?

Macroeconomics

2 • An economy has a CobbDouglas production function Y=Kα(LE)1−α (For

Question

2. • An economy has a Cobb-Douglas production function:

Y=Kα(LE)1−α.

(For

a review of the Cobb-Douglas production function, see Chapter 3.) The

economy has a capital share of 1/3, a saving rate of 24 percent, a depreciation rate

of 3 percent, a rate of population growth of 2 percent, and a rate of laboraugmenting

technological change of 1 percent. It is in steady state.

a. At what rates do total output, output per worker, and output per effective

worker grow?

b. Solve for capital per effective worker, output per effective worker, and the

marginal product of capital.

c. Does the economy have more or less capital than at the Golden Rule steady

state? How do you know? To achieve the Golden Rule steady state, does the

saving rate need to increase or decrease?

d. Suppose the change in the saving rate you described in part (c) occurs. During

the transition to the Golden Rule steady state, will the growth rate of output

per worker be higher or lower than the rate you derived in part (a)? After the

economy reaches its new steady state, will the growth rate of output per

worker be higher or lower than the rate you derived in part (a)? Explain your

answers.

Macroeconomics

All sources used including the textbook must be referenced

paraphrased and quoted material must have
1. ( Consumption) Use the following data to answer the question below: Real disposable income
(Billion $)
100
200
300
400 Consumption Expenditure
(Billion $)
150
200
250
300 Savings (Billion $)…
Macroeconomics

Assume the economy is at full employment as of January 2018 and the government passes a tax bill that reduces

Question

Assume the economy is at full employment as of January 2018 and the government passes a tax bill that reduces

taxes by $100B. The tax bill, however, does not change government spending. (These are are all short answer, but please provide enough detail to explain your answer. That is, it is not sufficient to claim prices go down or output goes up. Explain, briefly, why that happened.)

A. What effect is this likely to have on output and prices levels?

B. What effect will this have on interest rates and investment?

C. What is the likely response by the Federal Reserve?

D. Suppose that the economy was below full employment, how would that change your answer?

Macroeconomics

1) Generally if a county(the domestic county) has a trade deficit if will correct itself

Question

1) Generally if a county(the domestic county) has a trade deficit, if will correct itself

by:

A) the domestic currency getting weaker

B) the domestic currency getting stronger

C) using tariffs to slow the imports

D) increased gov. Spending

2)inflation and unemployment are tradeoffs under which economic view.

A) Neoclassical B) Isolationist C )Keynesian D) all of the above

3) increasing the requires reserves will:

A) increase money supply

B)decrease money supply

C) Not affect the money supply

D) you need the reserves on hand to answer

4)which of the following is a correct fiscal policy initiative during a recession?

A)tax increase

B) required reserve increase

C)government spending increase

D) discount rate increase

Macroeconomics

In an economy in which the multiplier has a value of 3 the price level has decreased from 115 to 110 As a

Question

In an economy in which the multiplier has a value of 3, the price level has decreased from 115 to 110. As a

consequence, there has been a movement along the aggregate demand curve from $18 trillion in real GDP to $18.9 trillion in real GDP.

A. What is the marginal prosperity to save?

B. What was the amount of the change in planned expenditures generated by the decline in the price level?

Macroeconomics

Consider the following hypothetical data for the US economy in 2020 (all amounts are in trillions of dollars)

Question

Consider the following hypothetical data for the US economy in 2020 (all amounts are in trillions of dollars).

Consumption- 11.0

Non-income-related taxes net of subsidies- 0.8

Depreciation- 1.3

Government spending- 3.8

Imports- 2.7

Gross private domestic investment- 4.0

Exports- 2.5

A. Based on the data, what is GDP? NDP? NI?

B. Suppose that in 2021, esports fall to $2.3 trillion, imports rise to $2.85 trillion, and gross private domestic investment falls to $3.25 trillion. What will gdp be in 2021, assuming that other values do not change between 2020 and 2021?

Macroeconomics

As output increases after a recession which one of the following statements best describes what happens to

Question

As output increases after a recession, which one of the following statements best describes what happens to

prices?

Select one:

a. As output increases, prices at first remain stable. As some resources begin to be fully employed, prices increase. But when the economy reaches full employment, only prices increase.

b. As output increases, prices at first remain stable. As some resources begin to be fully employed, prices increase. But when the economy reaches full employment, prices become stable again.

c. As output increases, prices at first remain stable; but at some point, they begin to rise proportionately.

d. As output increases, prices increase proportionately

Macroeconomics

45 According to the circular flow diagram which of the following is true?

I. The

Question

45.

According to the circular flow diagram, which of the following is true?

I. The

government is a buyer in the product market.

II. The government is a seller in the product market.

III. The government is a borrower in financial markets.

I only.

II and III only.

III only.

II only.

I and III only.

Macroeconomics

Bob received a C on his Calculus II exam and an A on his Macroeconomics exam Which of the following would best

Question

Bob received a C on his Calculus II exam and an A on his Macroeconomics exam. Which of the following would best

reflect a self-serving bias on his part?

a.Bob fe he did poorly on the Calculus II exam because he was coming down with the flu and well on his Macroeconomics exam because of his innate gift for understanding how the world works.

b.Bob fe he had done poorly in Calculus II because he is not good with numbers and well in Macroeconomics because the professor was an easy grader.

c.Bob fe he did poorly on the Calculus II exam because he does not study and well on the Macroeconomics exam because the professor happened to ask a few questions to which he knew the answers.

d.Bob fe he had done poorly in Calculus II because he was coming down with the flu and well in Macroeconomics because the professor was an easy grader.

Social Science

Can you explain the right answer to me? thank you!1 If output increases and the interest rate

Question

Can you explain the right answer to me? thank you!

1.If output increases and the interest rate

remains constant, there will be:

A) a decrease in the quantity of money supplied.

B) a decrease in the quantity of money demanded.

C) an increase in the quantity of money demanded.

D) an increase in the quantity of money supplied.

2.Money demand is a function of all the following variables except the:

A) tax rate.

B) price level.

C) level of real income.

D) interest rate.

3.Which of the following is a good argument against an independent central bank, it will:

A) keep monetary policy separate from other economic policies.

B) gradually become more dependent on government.

C) have more influence on expectations than a government institution.

D) be concerned to maintain its independence.

4.Under Keynesian assumptions, if there are fixed exchange rates, and there is a fall in demand for exports, current account ________ and the capital account will ________. A) deteriorate; improve

B) equilibrium; deteriorate

C) deteriorate; deteriorate

D) deteriorate; not change much

Macroeconomics

Suppose that the government provides more job training programs and job

search services so as to help workers

Question

Suppose that the government provides more job training programs and job search services so as to help workers

improve productivity and find jobs.

a.) What will be the effect on the natural unemployment rate? How does this affect the expectations-augmented Phillips curve and the long-run Phillips curve?

b.) Do you think that continuous expansionary monetary policy can have the same effects as in your answer to (a)? Explain your answer.

Macroeconomics

A balanced growth path is defined as the situation where

K/Y
is constant (or, equivalently,

Question

A balanced growth path is defined as the situation where K/Y is constant (or, equivalently,

where k = K/AL is constant). In the balanced growth path, the growth rates of variables are all constant. For each of the variables below, determine what the growth rate in the balanced growth path will be:

a. Output per effective worker

b. Consumption per worker

c. Investment

Macroeconomics

Can I have helpThe demand for labor curve will be more elastic for the firm than for the industry

Question

Can I have help

The demand for labor curve will be more elastic for the firm than for the industry

because

a. if all firms hire more labor, the product price will rise.

b. if all firms hire more labor, diminishing returns will not set in as quickly.

c. of none of the above reasons.

d if all firms hire more labor, increased output will lower product price and therefore make the marginal

revenue product curve more inelastic. of none of the above reasons.

Macroeconomics

What is the Solow model of Macroeconomics ? Please help me

Question

What is the Solow model of Macroeconomics ? Please help me

Intermediate Macroeconomics:
Economic Growth and the Solow Model
Eric Sims
University of Notre Dame
Fall 2012 1 Introduction We begin the course with a discussion of economic growth. Technically…
Economics

In 2009 the U S aggregate real income

Y, dropped sharply. We want to figure out what factors may have

Question

In 2009, the U.S. aggregate real income, Y, dropped sharply. We want to figure out what factors may have

caused the decline. Assume that the markets for money and for goods and services were both in equilibrium at all times. We know that the LM curve shifted downward due to a large increase in money supply. Which one of the following factors could have caused the decrease in income in that situation?

a.A temporary decrease in net taxes.

b.An increase in the expected return on investment.

c.A temporary decrease in the domestic price level.

d.A temporary increase in the domestic nominal interest rate.

e.A temporary decline in private consumption due to the decline in real weah.

Macroeconomics

This is a research project for my Macroeconomic class All the instructions are in the attachment I just need

Question

This is a research project for my Macroeconomic class. All the instructions are in the attachment. I just need

help with the highlight things (Inflation and Unemployment Running head: ECO 1002: INTERNATIONAL MACROECONOMICS REPORT
Eco 1002: International Macroeconomics Report Institution Name Course Section Date ECO 1002: INTERNATIONAL MACROECONOMICS REPORT Chinese…

Economics

I need help help with this assignment (2 PAGES ASSIGNMENT)1

Pick an article that you find that

Question

i need help help with this assignment.(2 PAGES ASSIGNMENT)

1. Pick an article that you find that

interests you in macroeconomics(examples includes: gas prices, food prices, housing prices, hybrid cars, supply of corn, ethanol production, elasticities, production possibility curves, fiscal, monetary policy, unemployment rates, GDP, international trade). The best place to find an article is in your local paper, cnn.com, or msnbc.com.

1 Running head: oil industry and prices Key Concepts in Economics
Name
Professor
Course Title
Date 2 Oil industry and prices
Key Concepts in Economics
It is clear that the oil industry is in its…
Economics

An increase in output will lead to an increase in both national saving and investment but

Question

An increase in output will lead to an increase in both nationa

l saving and investment but

a fall in the price level in the long run. True/False/Uncerta

in, explain and support your

answer in a diagram that displays

the market for loanable funds

.

Interest rate
Change in
interest rate,
S
increase in
demand For
loanable
Funds
Quantity
Macroeconomics

Hi i have a few questions about macroeconomics see attach file for questions

Question

hi,

i have a few questions about macroeconomics

see attach file for questions

1.
The author of The Weah of Nations was
Select one:
b. John Maynard Keynes.
c. Karl Marx.
a. adam smith
2.
Adam Smith believed that the basic motivation of human beings was
Select one:
b. desire…
Macroeconomics

The fictitious country alpha has a population of 28 million people of which 13 million are counted as

Question

the fictitious country alpha has a population of 28 million people, of which 13 million are counted as

workers

The fictitious country Alpha has a population of 28 million people , of which 13 million are counted as workers . The
Value of Alpha’s output in the year 2017 was $182 billion
a . The value for Alpha’s output per capita in 2017 is $
b . The value for Alpha’s average labor productivity in 2017 is $
Macroeconomics

Describe the components of economic perspective Explain how domestic output and national

Question

Describe the components of economic perspective.

Explain how domestic output and national

income are measured.

Explain how GDP is adjusted to account for price changes.

Describe how domestic output and national income are measured.

Describe what a price index is and how it is used.

Discuss how well GDP measures the well-being of society.

Macroeconomics

In general treating other macro variables as given as the aggregate real income of an economy rises temporarily

Question

In general, treating other macro variables as given, as the aggregate real income of an economy rises temporarily

in the short run,

a.real net exports rise by more than the income increase.

b.real net exports rise by the same amount as the income increase.

c.real consumption demand rises by less than the income increase.

d.real consumption demand rises by more than the income increase.

e.real consumption demand rises by the same amount as the income increase.

Macroeconomics

1 …

Graphically (i.e., using the IS-LM model) illustrate and explain what effect an increase in defau-risk

Question

1. Graphically (i.e., using the IS-LM model) illustrate and explain what effect an increase in defau-risk

premium (x) will have on the equilibrium output. How can we restore the output to its original level following this change?

Macroeconomics

1)Consider an economy currently at its fullemployment output level An increase in income tax rates will cause

Question

1)Consider an economy currently at its full-employment output level. An increase in income tax rates will cause

output to fall in the short run, but not in the long run. What does this mean?

2)A decrease in the official cash rate (the interest rate set by the central bank) will cause aggregate output to increase. What does this mean?.

3)Suppose that the government is concerned at the current level of household income among st the poorest 20% of households in the population. State and explain three (separate) macroeconomic policy options that the government could use to address this issue.

Macroeconomics

1 In an open economy a decrease in national saving the quantity of net capital inflows and _ __the equilibrium

Question

1.In an open economy, a decrease in national saving the quantity of net capital inflows, and _ __the equilibrium

domestic real interest rate, and the quantity of domestic investment.

A. increases; decreases; decreases B. increases; increases; decreases C. decreases; decreases; decreases D. increases; increases; increases E. leaves unchanged; leaves unchanged; leaves unchanged

2.Increasing the physical capital available to the workforce, holding other factors constant, tends to total output (y) and to average labour productivity (y/l).

A. increase; decrease B. decrease; keep unchanged C. increase; increase D. decrease; increase E. increase; keep unchanged

3.Every year the typical family on Planet Econ consumes ten pizzas, seven pairs of jeans and 20 litres of milk. In 2002 pizzas cost $10 each, jeans cost $40 per pair, and milk costs $3 per litre. In 2003, the price of pizzas went down to $8 each, while the price of jeans and milk remained the same. Between 2002 and 2003, a typical family’s cost of living:

A. increased by 4.5% B. decreased by 4.5% C. increased by 2% D. decrease by 2% E. none of above

4.The excess of government tax revenue over government spending is: A. the government budget surplus B. national saving C. national weah D. the government budget deficit E. the balanced government budget

5.If workers and employers expecting 3% inflation agree to a three-year nominal wage contract, and inflation turns out to be 5%, then: A. workers gain and employers gain B. workers gain and employers lose C. workers lose and employers gain D. workers lose and employers lose E. none of the above

Macroeconomics

A) If the economy is in a recession and the president invites three economists what would a Keynesian a

Question

a) If the economy is in a recession and the president invites three economists, what would a Keynesian, a

monetarist, and a Neo Classical say to offer explanation and policy options in two sentences or less.

1) Keynesian:

2) Monetarist:

3) NeoClassical:

2) What are the similarities and the differences between the crises of the 1930s and 2008? (mention two for each)

c) What policies or thoughts would you offer if you were an influential economist to prevent deep recessions in the future?

Macroeconomics

1 All but one of the following are characteristics of shortterm economic fluctuations Which is the

Question

1.All but one of the following are characteristics of short-term economic fluctuations. Which is the

exception?

Select one:

a. Unemployment rises during recessions

b. Expansions and recessions are irregular in length and severity

c. Durable-goods industries are more sensitive to short-term fluctuations than service and non-durable industries

d. Expansions and recessions are fe in only a few sectors of the economy

2.Changes in taxes and transfers affect planned spending:

Select one:

a. directly

b. by changing disposable income and, consequently, consumption

c. only when there is an expansionary gap

d. autonomously

3.Supply-siders are considered to be supporters of the need for tax cuts to encourage people to:

Select one:

a. work harder and spend more on innovations

b. work harder, save more and innovate

c. spend more and work in the IT industry

d. innovate and save money

4.In the short-run Keynesian model, to close a recessionary gap of $10 billion, taxes must be:

Select one:

a. increased by $10 billion

b. increased by less than $10 billion

c. decreased by $10 billion

d. decreased by less than $10 billion

Macroeconomics

True or False

The production function is the relationship between output, inputs and inflation, which is

Question

True or False: The production function is the relationship between output, inputs and inflation, which is

important to do since inflation can erode the real value of output.

Macroeconomics

Going over flash cards and do not understand these ones! thx1

If inflation rises to 9%, what monetary

Question

Going over flash cards and do not understand these ones! thx

1. If inflation rises to 9%, what monetary

policy would be used to fix the problem? Explain how output, price level, employment and interest rates are impacted?

2. If inflation and unemployment reach 8% at the same time, what fiscal policy would be used to fix the problem? Explain how output, price level, employment and interest rates are impacted?

Can you also tell me if its fiscal or monetary?

Macroeconomics

KEYNESIAN CROSS DIAGRAMPlease find below the the full solution of the following problem

Question

KEYNESIAN CROSS DIAGRAM

Please find below the the full solution of the following problem

.

I would like to know all the calculations necessary to

-fill te table

-solve for Y

-Understand the relation with the keynesian theory

Thank you

1. The chart below represents the data behind a Keynesian cross diagram. Assume that the tax rate is 0.4 of national income; the MPC out of the after-tax income is 0.8; investment is $2,000; government spending is $1,000; exports are $2,000 and imports are 0.05 of after-tax income. What is the equilibrium level of output for this economy?

Solution: The following table illustrates the completed table. The equilibrium is level is italicized. We can solve for Y, where Y = National Income using:

Y=AE= C + I + G + X – M

Y = $500 +0.8(Y-T) + $2,000 + $1,000 + $2,000 – 0.05 (Y – T)

Solving for Y, we see that the equilibrium level of output is Y = $10,000.

National
After – tax
Consumption | It G +’x
Minus
Aggregate
Income
Income*
Imports
Expenditures
$8, 000
$4, 340
$9, 000
$10, 000
$11, 000
$12, 000
$13, 000
Macroeconomics