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A: Nominal value: face value of an asset or security.
Q: difference between nominal intrest rate and real intrest rate
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A: Real income is income adjusted for inflation.
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A: Real interest is the interest rate adjusted after inflation. It adjusts the observed market interest…
Q: 2. Alternative price indexes Because there isn't one single measure of inflation, the government and…
A: Nominal GDP, or unadjusted GDP, is the market value of all last/final products created in a…
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A: The interest rate is the amount of payment that is charged by a lender on a borrower for the use of…
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A: Nominal GDP is the value of all goods and services produced by the country in a fiscal year at…
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A: Rapid deflation is the sudden decrease in prices. Real income= nominal income / price People living…
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Q: Nominal GNP is the same as, a. GNP at constant prices b. Real GNP c. GNP at current prices d. GNP…
A: According to the given question In simple words we can say that a Nominal Gross National product…
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A:
Q: State at least three differences between GDP deflator and CPI as the measure of inflation rate
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Q: 2. Alternative price indexes Because there isn't one single measure of inflation, the government and…
A: The GDP deflator is calculated by dividing the value of final goods and services produced in an…
Q: a) Following data from the labour department of Country X is provided In Millions Total Civilian…
A: Disclaimer: Since you have asked multiple questions, we will solve the first question for you. if…
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A: The Fisher calculation forecasts that the nominal rate would equivalent the equilibrium real rate…
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A: The gross national product (GNP) is the total market worth of a country's economy's final products…
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A: Inflation is the general rise in the price level of the goods and services traded in the market.
Q: the cpi in 1930 equaled 0.20. the cpi in 1931 equaled 0.18. the rate of inflation between 1930 and…
A: The rate of inflation formula is: Inflation=CPIt-1-CPItCPIt-1Inflation=0.20-0.180.2Inflation=0.1%
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A: A price index is a number that expresses the level of a set of commodity prices in proportion to the…
Q: Explain one major difference between the following pairs of economic terms. a. nominal variable and…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: real interest rate is
A: Real interest rate is the rate which a person has after deducting the inflation Or price rise effect…
Q: Answer the next four questions based on the following data using year 1 as the base year. All…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: 2. Alternative price indexes Because there isn't one single measure of inflation, the government and…
A: CPI and GDP deflator are two different index to measure inflation, that is percentage increase in…
Q: Suppose the Consumer Price Index in 2019 is 131.9, with 2002 as the base year. (a) What is the…
A: Answer: Given, Consumer price index (CPI) in 2019 = 131.9 Consumer price index in base year (2002) =…
Q: If nominal GDP is $400, real GDP is $200, and the money supply is $100, then calculate price level
A: Nominal GDP = $400 Real GDP = $200 Money supply = $100
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A: Answer - Need to find- percentage change Aggregate away from home food expenditure from 1997 to 2019…
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A: The aggregate product function represents the total output for an economy to the total amount of…
Q: Analyze the computation of inflation from a GDP deflator, and the accuracy it holds as compared to…
A: The GDP deflator is identified as the inflation in an economy, which is calculated by dividing…
Q: Suppose that over the past year, the real interest rate was 4 percent and the inflation rate was -1…
A: Inflation is the rate at which the value of a currency is falling and, consequently, the general…
Q: Distinguish between the Consumer Price Index (CPI) and the Producer Price Index (PPI) Q.2.2 Briefly…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: If nominal wage growth is greater than the sum of change in labor productivity less inflation, does…
A: Real wages square measure wages adjusted for inflation, or, equivalently, wages in terms of the…
Q: 2. Alternative price indexes Because there isn't one single measure of inflation, the government and…
A: The GDP deflator for this year is calculated by dividing the value of all goods produced in an…
Q: The CPI differs from the GDP deflator in that the CPI O always indicates a higher rate of inflation…
A: The inflation refers to an increase in the general price level over time. There are several…
Q: The CPI index and the PCE index are both used to measure which of the following interest rates O…
A: Inflation: It is the decline in the power of purchasing a currency over a given period of time.
Q: f the nominal interest rate is 10% and the inflation rate is 5%. What is the real interest rate? (Do…
A: The real interest rate is the rate of interest an investor, saver or lender receives after allowing…
Q: Consider a country that has a positive rate of inflation each year. The base year used to calculate…
A: Positive Inflation rate can be described as the percentage increase in the price level of the…
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- Refer to the above diagram. The economy is at equilibrium at point C. What fiscal policy would increase real GDP? Group of answer choices Increase aggregate demand from AD2 to AD1 by decreasing taxes. Decrease aggregate demand from AD2 to AD3 by increasing taxes. Increase aggregate demand from AD1 to AD2 by increasing government spending. Make no change because the economy is at or near its full-employment level of real output.Suppose in our two-period model of the economy that the government, instead of borrowing in the current period, runs a government loan program. That is, loans are made to consumers at the market real interest rate r, with the aggregate quantity of loans made in the current period denoted by L. Government loans are financed by lump-sum taxes on consumers in the current period, and we assume that government spending is zero in the current and future periods. In the future period, when the government loans are repaid by consumers, the government rebates this amount as lump-sum transfers (negative taxes) to consumers. We use the same notation as in the lecture notes (y, y′ , c, c′ ,t, t′ , s, T, T′ ). Also, we use l ≡ L/n to represent the size of the loan that each individual consumer takes from the loan program, where n is the population. 1) Write down the government’s current-period budget constraint and its future-period budget constraint. 2) Determine the present-value budget…Assume that the current unemployment rate in Country A is lower than the natural rate of unemployment. Draw a single correctly labeled graph with both the long-run Phillips curve and the short-run Phillips curve. Label the current short-run equilibrium point Z. Identify a specific fiscal policy action that would bring the economy to full employment. Draw a correctly labeled graph of the loanable funds market, and show the effect of the fiscal policy from part (b) on the real interest rate in the short run. Now assume instead that there is no fiscal policy action. Will the short-run Phillips curve shift to the right, shift to the left, or remain the same over time? Explain.
- When there is a problem of a delay in terms of implementation of the fiscal policy, that would be categorized as _____. execution lag information lag decision lag Fiscal policy nowadays are focused on eliminating GDP gap True False When the Central Bank controls the money supply by controlling the amount of high-powered money in the economy, that is called _____. interest rate fixation selective credit control open market operations required reserves ratio policy The focus of monetary policy nowadays is by using interest rate as an indicator. True Falsecan you tell me if these answers are correct? they are true/false. 14) Crowding out, when it occurs, involves increasing interest rates. -fals 15) In the Keynesian range of the AS curve, increases in taxes will raise unemployment- trueExplain the role of supply-side policies in the macro-economy. In the context of your analysis distinguish between New Classical and Keynesian approaches to supply side policies. Illustrate your answer with appropriate diagrams.
- Real Business Cycle Model The government of “Defitonia” only relies on lump-sum taxes to finance its expenditures, and is evaluating a fiscal consolidation plan to bring down its fiscal deficit. Two alternatives are being assessed: increasing current taxes, or cutting current government expenditures. In this problem, you will analyse both alternatives through the lens of the Real Business Cycle (RBC) model studied in class. (a) Suppose that the government of Defitonia increases current taxes, but does not change its level of spending in either period. What are the effects of the tax change on the real wage, employment, the real interest rate, and output? Explain by using the equilibrium diagrams for the current labour market and for the current goods market in the RBC model. (b) Now suppose that the government of Defitonia cuts current government spending. What are the effects of the tax change on the real wage, employment, the real interest rate, and output? Explain by using the…Automatic stabilizers refer to the money supply and interest rates that automatically increase or decrease along with the business cycle. government spending and taxes that automatically increase or decrease along with the business cycle. changes in the money supply and interest rates that are intended to achieve macroeconomic policy objectives. changes in federal taxes and purchases that are intended to achieve macroeconomic policy objectives.what does the Relative Income hypothesis, permanant income hypothesis, and the life circle hypothesis have in common. how the keyensian hypothesis and that of the permanent income hypothesis differ in term of their policy implication. compare the policy implication of each of the following theories of comsumption behavior, the permanant income, relative income and the life circle hypothesis.
- Use the following versions of the IS-LM model to answer all sections: Question: c. determine the equilibrium value of Y, if M = 2,200, P = 1, and Yp = 4000 d. Based on the results of question point c, does the government budget experience a surplus, deficit, or balance?14. Of the following secondary effects which dissipate the strength or effectiveness of expansionary Keynesian macroeconomic policy, which one is associated with rising interest rates because of greater government borrowing to finance a budget deficit? a) Crowding out effect b) Inflation c) transactions demand for money d) sovereign debt crisis e) All the above“Expansionary fiscal policy is more effective in influencing the aggregate income level when investment is interest-elastic”. Do you agree with this statement? Why and why not? Explain your answer based on the IS-LM framework.
