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d) What two assumptions are included in calculating the maximum change in the money supply

determined by the flows of goods and the determinants of exchange rate in the long

The long-run equilibrium of the economy is found where the aggregate-demand curve crosses the long-run aggregate-supply curve (point A). When the economy reaches this long-run equilibrium, the expected price level will have adjusted to equal the actual price level. As a result, the short-run aggregate-supply curve crosses this point as well.

(c) Suppose as a result of a financial crisis, investment decreases to 1 and exports decrease to 2. What is

1. (15 points) The accommodative policies of the Federal Reserve System, the European Central Bank, and the Bank of Japan involve the

In this paper, we will be using the log-log model. The log-log model used for the demand for wealth (attuned for inflation). We will be using the M1, as a display, for demand on wealth and interest rate as the illuminating variable affecting the demand for wealth. Using the regression, we will study the hypothesis. For this paper, the hypothesis used will talk about the connection between money and the interest rate. The null hypothesis, in this case, will be the interest affecting the demand for money in the economy. The data that we will be reviewing is from October 2008 to October 2011, 3 years worth of data. This connection will give us the basic understanding of the performance of the monetary policy in US economy after the crisis.

Refer to the sets of the aggregate demand, short-run aggregate supply, and long-run aggregate supply curves. Use the graphs to explain the process and steps by which each of the following economic scenarios will shift the economy from one long-run macroeconomic equilibrium to another equilibrium. Under each scenario, elaborate the short-run and long-run effects of the shifts in the aggregate demand and aggregate supply curves on the aggregate price level and aggregate output (real GDP).

3. Exhibit 7 applied an 11% inflation rate to every single financial line throughout the

If each gains $25 from this transaction, which of the following conclusions can be drawn?

3. Which of the following do policy makers tend to target when setting monetary policy?

An increase in autonomous consumer expenditure causes the equilibrium level of aggregate output to ________ at any given interest rate and shifts the ________ curve to the ________, everything else held constant.

3. Who would benefit from unanticipated inflation –lenders or borrowers? Why? Who would benefits from anticipated inflation –lenders, borrowers, or neither? Why?

Q19) In Figure 2, it is _______ for an economy to be at point B.

Similarly, the study of Ramchandran and Kamaiah (1992) has also noticed the uni-directional causality running from money supply to price level for the economy of India as in case of Darrat (1986). On the other hand, the study of Aghevli and Khan (1978) for Brazil, Columbia, the Dominican Republic, and Thailand, has found bidirectional causality between money and prices. Likewise, Maish and Maish (1994) examined the question of causality between money and price in the context of Asian developing economy, India. This study supported monetarists’ view that money supply was leading variable and price was lagging variable in the context of India when they studied the linkage between money supply and price during the period

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