Multiple Choice Question In general, an increase in the money supply causes: deflation. an increase in aggregate demand. O no verifiable change in economic variables. O inflation.
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Multiple Choice Question In general, an increase in the money supply causes: deflation. an increase in aggregate
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- 1. In an OLG model with money: Each gen picks 12 banans when young, 4 bananas when old. Central bank prints out 2 units of money, given to gen 0 for free. A. In equilibrium, 1 money = ______ bananas. B. The level of employment is _____ in each period. (how many people are employed each period) C. The unemployment rate in this economy is ______%. what other information do you need? I dont have any other information, this is all that I was given.QUESTION 22 Which of the following is not true? OA. The extreme new classical aggregate supply curve is vertical. B. The extreme Keynesian aggregate supply curve is horizontal. OC. The extreme supply-side case has tax cuts shifting the aggregate supply curve leftward. D. The neoclassical synthesis has short-run upwards sloping aggregate supply curves and vertical long run aggregate supply curves. O E. The extreme Keynesian case has tax cuts shifting aggregate demand only. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.24. Which of the following groups benefit from an unanticipated rise in the inflation rate ? O. homeowners with foxed - rate mortgages O. elderly people living on fixed incomes O. creditors or lenders O. workers on contracts without escalator claines 25. Suppose oil prices continue to rise , causing a supply shock . If the Fed increases interest rates , what would be the long run outcome ? O. The economy returns to long run equilibrium at a lower output but higher price level O. The economy returns to long run equilibrium at the original price level and output O. The economy returns to full employment but at a higher price level O. The economy returns to the original price level but at a lower output
- An economy's aggregate demand curve (the relationship between short-run equilibrium output and inflation) is described by the equation:Y = 15,000 - 12,000π, where π is the inflation rate. Initially, the inflation rate is 2 percent or π = 0.02. Potential output Yp equals 14,640.Note: Keep as much precision as possible during your calculations. Your final answer for inflation should be accurate to at least two decimal places and output should be accurate to the nearest whole number.a) Find inflation and output in short-run equilibrium. Inflation : 0%Output : $0 b) Find inflation and output in long-run equilibrium. Inflation : 0%Output : $0Please no written by hand solution Suppose you are given the following scenario: The Federal Reserve has reported the federal funds rate at 2.75 percent. The economy’s growth rate over the past several quarters has languished around 1 percent (annualized) per year while unemployment has increased by 1.5 percentage points to a current national average of 8.7 percent. The GDP deflator index has remained relatively steady, yielding an average inflation rate of 1.8 percent over the last two years. What would you recommend as a Keynesian policy advisor? In the first part of your answer, identify the economic problem(s) best described in the scenario above. Secondly, determine the appropriate economic policy (fiscal or monetary) that would be most effective in responding to the economic problem(s) identified in part one. Lastly, explain the consequences your recommended policy would have on the macroeconomy in both the short run and the long run. Your answer should be at leas a couple of…E4 How to draw AD and AS curve for this? AD= Y= 700+20 x (600/P) -- 600 is the Money supply (M) AS= Y= 940+ (P - 60) Or how can I draw AD and AS generally when the equations are similar to above?
- A. What assumptions did Thomas Sargent make when he claimed that inflation is always and everywhere a fiscal phenomenon?" B. Why is it appropriate in the book's short-term model for the author to use the Phillips Curve as an Aggregate Supply curve? Does it capture the working of the labor market as well as an AS curve based, say, on sticky wages? C. Provide an example of the book's short-run model being based on "microfoundations."Cost-push inflation occurs: O a. when there are increases in production costs. O b. when "too much money is chasing too few goods." O c. at or close to full employment. O d. because of excess total spending. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.A) Suppose that an economy has the Phillips curve π = π-1 – 0.5(u − 0.06). 1) Graph the short-run and long-run relationships between inflation and unemployment. 2)How much cyclical unemployment is necessary to reduce inflation by 3 percentage points? Using Okun’s law, compute the sacrifice ratio. B)Mathematically prove that balanced budget multiplier is one. Interpret it C)Explain destabilizing effect of deflation which supports the money hypothesis of great depression. Use graph where feasible. D)“The steeper is the LM curve, the more effective is the monetary policy” Do you agree with the statement. Graphically explain.
- QUESTION 5Which of the following best describes inflation?O a. Economic growth.O b. An increase only in the price of energy.O c. An increase in the overall price level in an economy.O d. Ballooning debt.The Federal Reserve seeks to reduce The Fed doesn't seek to reduce the unemployment rate to zero because the tools of monetary policy are OA. only effective in reducing the level of frictional unemployment. OB. ineffective in reducing the level of cyclical unemployment. OC. ineffective in reducing the level of frictional unemployment. OD. All of the above. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.The quantity theory of money: What is the key endogenous variable in the quan-tity theory? Explain the efect on this key variable of the following changes: (a) Te money supply is doubled.(b) Te velocity of money increases by 10%.(c) Real GDP rises by 2%.(d) Te money supply increases by 3% while real GDP rises by 3% at thesame time