Consider an economy described by the following: a. Derive expressions for the MP curve and the AD curve. The expression for the MP curve is: OA. r=2+0.5m OB. r=1+0.5x O C. r=1+0.75m OD. r=2+0.75m C = $3.5 trillion 7 = $1.3 trillion G= $3 trillion T = $2 trillion NX $-1 trillion. f = 1 The expression for the AD curve is: mpc = 0.75 d = 0.3 X = 0.1 λ = 0.5 r = 1 OA. Y= 18.4-0.8. OB. Y=15-0.8m. OC. Y= 15-1.3. OD. Y= 18.4-1.3. b. Assume that = 1. The real interest rate is %. (Round your response to two decimal places) The equilibrium level of output is $ trillion (Round your response to two decimal places.) c. Suppose government spending increases to $3.5 trillion. What happens to equilibrium output? Suppose government spending increases to $3.5 trillion. What happens to equilibrium output? quilibrium output will to $ trillion. (Round your response to two decimal places.) If the Bank of Canada wants to keep output constant, then what monetary policy change should it make? order to keep output constant, the Bank will have to two decimal places.) the real interest rate to r=%. (Round your response

Consider an economy described by the following: a. Derive expressions for the MP curve and the AD curve. The expression for the MP curve is: OA. r=2+0.5m OB. r=1+0.5x O C. r=1+0.75m OD. r=2+0.75m C = $3.5 trillion 7 = $1.3 trillion G= $3 trillion T = $2 trillion NX $-1 trillion. f = 1 The expression for the AD curve is: mpc = 0.75 d = 0.3 X = 0.1 λ = 0.5 r = 1 OA. Y= 18.4-0.8. OB. Y=15-0.8m. OC. Y= 15-1.3. OD. Y= 18.4-1.3. b. Assume that = 1. The real interest rate is %. (Round your response to two decimal places) The equilibrium level of output is $ trillion (Round your response to two decimal places.) c. Suppose government spending increases to $3.5 trillion. What happens to equilibrium output? Suppose government spending increases to $3.5 trillion. What happens to equilibrium output? quilibrium output will to $ trillion. (Round your response to two decimal places.) If the Bank of Canada wants to keep output constant, then what monetary policy change should it make? order to keep output constant, the Bank will have to two decimal places.) the real interest rate to r=%. (Round your response

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter10: Bringing In The Supply Side: Unemployment And Inflation?

Section: Chapter Questions

Problem 3TY

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