D, E, and F please and thanks! meAn economy is currently in a recession.(a) Draw a single correctly labeled graph with both the short-run and long-run Phillips curves. Label thecurrent short-run equilibrium as point X.LRPCinflatinSRPCUnemployment.(b) is the expected inflation rate greater than, less than, or equal to the actual inflationrate? The expected inflation rate will beless than the actual inflationrate(c) Will borrowers with fixed-rate loans benefit from the situation that you identified in part (b)?Explain. Borrowers with fixed rate loans will benefit from such situation.becausethe value of the loan will decrease with a lower Inflation rate(d) Assume the government budget is balanced. In the absence of any discretionary policy action, willthe government budget move into surplus, deficit, or remain in balance?Explain. The government budget will remain in balance in the absence of- any discretionary policy.-(e) On your graph in part (a), show how the economy will adjust in the long run in the absence of anydiscretionary policy action.(f) Now assume instead the government increases spending without changing taxes to close therecessionary gap. What effect will this policy have on the nationaldebt? An increase in government spending without changing faxes willcause the national debt to increase

The Phillips curve is a graphical representation of the inverse relationship between the rate of…

(d) Assume the government budget is balanced. In the absence of any discretionary policy action, will the government budget move into surplus, deficit, or remain in balance? Explain. The government budget will remain in balance in the absence of any discretionary policy. (e) On your graph in part (a), show how the economy will adjust in the long run in the absence of any discretionary policy action. (f) Now assume instead the government increases spending without changing taxes to close the recessionary gap. What effect will this policy have on the national debt? An increase in government spending without changing taxes will - cause the national debt to increase

(d) Assume the government budget is balanced. In the absence of any discretionary policy action, will the government budget move into surplus, deficit, or remain in balance? Explain. The government budget will remain in balance in the absence of any discretionary policy. (e) On your graph in part (a), show how the economy will adjust in the long run in the absence of any discretionary policy action. (f) Now assume instead the government increases spending without changing taxes to close the recessionary gap. What effect will this policy have on the national debt? An increase in government spending without changing taxes will - cause the national debt to increase

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Money And The Economy

Section: Chapter Questions

Problem 10QP

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Suppose the public believes that a newly announcedanti-inflation program will work and so lowers itsexpectations of future inflation. What will happen toaggregate output and the inflation rate in the short run?
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ASAP
The table below reports the actual inflation rate from 2016 to 2020. Complete the table, assuming people form expectations adaptively. Give all answers to two decimals. Year 2016 2017 2018 2019 2020 Actual inflation rate 3% 4.50% 7.00% 6.00% 4.00% Expected inflation rate a) d) e) 3% 4.50% % % % b) c) f) Error 0% 1.00% % % %
Refer to the accompanying figure. LRAS Intatona BRAS SRAS AD AD Output Starting from long-run equilibrium at point C, an adverse inflation shock that increases inflation from n to n' will lead to a short-run equilibrium at point and eventually to a long-run equilibrium at point ,if left to self-correcting tendencies.
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Critically discuss why oil price shocks in the US may have had different effectsin the 1970s versus the 2000s before the Financial Crisis. Use three-panelgraphs of the IS-LM-PC model and graphs of inflation over time to help explainyour answe
The importance of using rather than saving your ammunition in the presence of the zero lower bound. Suppose inflation is described by the accelerations Phillips curve, and that output is determined by a simple IS curveInitially, the central bank is setting the nominal interest rate at a strictly positive level: i(0) > 0. Assume(a) Suppose the central bank keeps i constant at i (0). Sketch the behavior of inflation and output over time.(b) Suppose the central bank keeps i constant at i (0) until some time when bπ(t) < 0, and then permanently reduces i to zero. Sketch the behavior of inflation and output over time.(c) Suppose the central bank permanently reduces i to zero at t = 0. Sketch the behavior of inflation and output over time.(d) Explain your results intuitively.
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