Why does the government spend money surveying consumers and firms on their current level of confidence in the economy? How might the Federal Reserve react to a sudden drop in consumer confidence? Use IS-LM analysis (DRAW IT) and explain it to support your answer.
Now we will solve for the steady state in a calibration of the US economy in 2000. In this problem, you will assume that the rate of growth of the work force is n = 0.017 and there is no exogenous technological progress. The aggregate production function for the US economy in 2000 is Y = (11.5)K 1/3 L 2/3 . The units are bill
According to Gerald Baker, columnist for the London Financial Times, November 23, 1999, "In the United States, banks are, by whichever measure chosen, in unusually good shape for this stage of an expansion. There are few signs of emerging excesses that even undermined America's own banking system at the end of the 1980's...Agai
The question asked that suppose that the Organization of Petroleum Exporting Countries raises oil prices by 50 percent in 2005. What effect will thishave on the U.S. Aggregate demand curve? On the U.S. Short-run aggregate supply curve?
Please see the attachment. I require very specific explanations for each part. If necessary, assumptions may be made but please make these explicit and make sure they are reasonable so that I can follow what you did. Also make the solutions as technical as possible. (See attached file for full problem description)
Answers to questions: Regarding the economy's adjustment process, use the AD/AS model to: a) Show the short-run effects of an increase in desired saving(assuming that the economy is initially in a long-run equilibrium with Y* = Y). b) Describe the adjustment process that brings the economy to its new long-run equilibriu
Why can output rise "without inflation" in the "Keynesian" range of the aggregate supply curve?
Please see attached. --- 2. (A Change in Autonomous Spending) Suppose that when aggregate output equals zero, consumption equals $100 billion, autonomous investment equals $200 billion, government purchases equal $50 billion, and net exports equal $50 billion. Suppose also that MPC is 0.9 and MPM is 0.1. a) Construct a t
Since inventories are not a large component of GDP, how can they affect GDP so sharply? How will the replenishment cycle affect GDP in the near future? I know that there is a relationship between consumption expenditures and inventories and that there is an interdependence, but I am not sure how to answer this. It most likely
This is a question from a past exam paper in Macroeconomics. Unfortunately I haven't been able to get an answer sheet for this paper so I am looking for a "model answer" (if such a thing exists!) to the question for revision. Under what circumstances would a rise in aggregate demand have little effect on real national income?
Consider a closed economy, with fixed prices, represented by the following set of equations: D = C + I + G C = cYd Yd = (1 - t)Y t = 0.25, c = 0.8 I = 700 - 100r G = 300 L = 2500 + 2Y - 500r Where, D is the aggregate demand, C is consumption, Yd is the disposable income, t is the tax rate, I is investment, r is
Text Reference - www.mcgrawhill.ca/college/colander 3. The United States is proposing a significant increase in duty on Canadian softwood lumber. Use appropriate diagrams to answer the following questions about the Canadian economy. (20 marks) (a) How would higher duty on softwood lumber affect the equilibrium income and the
Explain in detail why the aggregate demand curve slopes down. Specify how your explanation differs from the rationale behind the downward sloping demand curve for a single product?
I am attaching the problem in word document. You can solve the problem in that document.
"The idea of the Fed having to choose between hawk and dove policies after an adverse supply shock is plain silly. All the Fed has to do is shift the curve back to its original position, which would prevent both recession and inflation. Do you agree? Why or why not?
Subject: modern graph and prediction of aggregate supply and demand curve Details: write a paper describing my assessment of the current aggregate demand and aggregate suppy curves; my prediction and prescription for the near future. sources must be sited. The ad/as curves reasonably coincide with reality, include graphics, ec
Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer. a. Investment demand becomes less sensitive to changes in the interest rate. b. The marginal propensity to consume rises. c. The money multiplier rises. d. Ba
What are supply shocks? Distinguish between beneficial and adverse supply shocks. Do such shocks affect the short-run supply curve, the long-run supply curve, or both? What is the resulting impact on potential GDP?
What are some of the differences between the Classical Supply/Demand Model and the AS/AD model?
A classical economist spends a good deal of time worrying that: A) policies will overshoot their output marks and can therefore never move GDP closer to its potential. B) government spending will crowd private spending and investment out of the market. C) stabilization policy is never sufficiently "fine-tuned." D)
Please answer each question with detailed solutions and prefferably send back solutions in a text based format. also please attend to this problem set as soon as possible thanks
Ceteris paribus and comparative statics are commonly vehicles for economic analysis. Explain using the dramatic, large scale expansion of soy bean purchases by China (2003, 2004 and beyond).
Determining the effects of a situation on the economy. A multiple choice question with an explained answer.
Consumer-entrepreneurs set up a small-scale production plant on their side of the river, offering competition to the producers on the other side. Unfortunately, without proper licensing this production plant is technically illegal. Accordingly the consumer-entrepreneurs have to sell thier product at a price 20% higher than the p
I only need help with plotting the graphs for question 1b and question 2. Please be as specific as possible in plotting the graphs and explaining. Thanks in advance. The questions were already submitted (posting 3000) I only need help with the graphs. See attatchments for TA's earlier response. Thanks in advance 1. A mo