Re An economy is initially in long-run billion. Then, an increase in demam to increase to $7 billion and the pri to cut government spending in ord marginal propensity to consume is A. $1 billion. B. $1.5 billion C. $2 billion. D. $3 billion
Q: When the Federal Reserve was created, its most important role was intended to be a storage facility…
A: Federal reserve system often knows as "fed" is the central bank of the united states. It uses its…
Q: A new partner contributes accounts receivable to a partnership, which appears in the ledger of his…
A: Since the provided question involves the aspect of monetary transaction with Business, it has been…
Q: Consider a keynesian macromodel Y=(C0+G+I) / (1-c) where C0 is autonomus consumption, G is…
A: The investment level and the interest rates have an inverse relationship. Interest rates influence…
Q: 1 1 09. Consider a production function of the form y=AK2 L2 where y is units of output, K is units…
A: The objective of the question is to determine the increase in output when the number of people…
Q: Which of the following is a weakness in using the CPI to measure changes in the cost of living? (A)…
A: (D) All of the aboveEach of the statements (A, B, and C) represents a weakness in using the Consumer…
Q: Suppose the minimum reserve ratio for private banks is lowered. As a result, banks can make _______…
A: Reserve ratio is the ratio at which bank should reserve the part of cash or deposit in cash , it…
Q: Suppose that after the change illustrated, people in China begin saving more money in American…
A: A financial market where people, companies, and governments come together to lend and borrow money…
Q: The antitrust law that made "every contract, combination . . . or conspiracy, in restraint of trade"…
A: Antitrust laws play a pivotal role in regulating and maintaining fair competition within the market.…
Q: Consider the payoff matrix M for a non-zero-sum game between player 1 with a choice of moves d₁ and…
A: “Since you have posted multiple questions, we will provide the solution only to the first question…
Q: The government has identified four markets that they would like to intervene in to help domestic…
A: Producer's surplus is an economic concept that represents the difference between the actual price a…
Q: B. Problems and Applications Q3 Taylor Swift has just finished recording her latest album. The…
A: Total revenue equals price times quantity. It shows the total receipts a seller can get from selling…
Q: Jane quit her job at IBM where she earned $50,000 a year. She cashed in $50,000 in corporate bonds…
A: a)1) Total Revenue is the total money earned by the business.TR = Price * QuantityPrice = $400 per…
Q: For the production function Q = k0.6L0.5 and the budget 130 = 3K + 3L find the NEW LEVEL of the cost…
A: The production function Q = K0.6L0.5 represents a Cobb-Douglas production function, where capital…
Q: Dollar Price of 100 Yen 0.80 0 Supply Yen D Demand Yen Quantity of Yen Assume that Japan and the…
A: The equilibrium point is where the demand curve meets the supply curve, or intersects each other.…
Q: A couple is deciding where they will go out for an evening. They can go out alone, or go with the…
A: Nash equilibrium is a sub-topic of game theory in which players play games and use strategy and…
Q: tell something about economic activity of surat
A: Surat is located on the western coast of India in the state of Gujarat, is a bustling city known for…
Q: Estimate the cost of expanding a planned new clinic by 14.2,000 ft². The appropriate capacity…
A: COST can be defined as a concept that shows the amount of expenditure and any other sacrifice such…
Q: Suppose that an acre of wetland can sequester 100 tons of CO2 and reduce the risk of ts would…
A: Given values,the value of the wetlands ecosystem service per acre is $8,030.
Q: 6) What are the three monetary policy tools of the Fed? Briefly describe how each tool can be used…
A: The Federal Reserve is responsible for the change in the movement of finances within the economy. It…
Q: 16. Consider a market in which high-quality and low-quality television sets are sold. Before…
A: Market refers to the place or platform that facilitates the exchange of goods or services for…
Q: Neoclassical economics does NOT argue _______ Question 1 options: GDP is determined by supply…
A: Neoclassical economics is a school of economic thought emphasizing individual rationality, market…
Q: Based on the best available econometric estimates, the market elasticity of demand for your firm's…
A: When elasticity of demand, marginal cost of product is given then optimal price will be calculated…
Q: Which one of the following is not a role of a National Governing Body? Question 22Answer a.…
A: The objective of the question is to identify the role that is not typically performed by a National…
Q: If a bank uses $100 of excess reserves to make a new loan when the reserve ratio is 25 percent, what…
A: Money supply refers to the sum of all types of money that are available and circulating in the…
Q: If the economy booms in the United States while going into recession in other countries, the U.S.…
A: The trade balance is the difference between the export and import. The trade deficit occurs when…
Q: 3. A country had real GDP per person of 5000 in 2005 and 5152 after 15 years. What was the average…
A: This concept can be defined as a tool that helps in measuring the total amount of production of…
Q: Using the previous table, what is the profit maximizing level of output?
A: Profit Maximization:Profit maximization happens at the point where the marginal revenue (MR) and…
Q: An environmentally friendly 3,100-square-foot green home (99% air tight) costs about 8% more to…
A: B/C ratio:It rеfеrs to thе bеnеfit rеcеivеd by a projеct in monеtary valuе with rеspеct to thе cost…
Q: Suppose the unemployment rate is 5% under one of these two outcomes and 3% under the other. Based on…
A: A Phillips curve shows the inverse relationship between inflation rate and unemployment rate. Hence,…
Q: The following graph represents the money market for some hypothetical economy. This economy is…
A: Government securities are refers to the financial instruments issued by the government to borrow…
Q: Create a game with one NE in pure strategies and one NE in mixed strategies.
A: A pure strategy in game theory refers to a specific, definite action or choice that a player makes…
Q: If Dell can earn an annual interest rate of 4%, what is this float worth to Dell per dollar spent on…
A: Float worth is the financial benefit that a business receives when it delays paying its suppliers in…
Q: Fiscal policy Data lag Progressive Transfer payments Surplus Proportional Transmission lag…
A: Macroeconomic analysis provides a thorough picture of an economy's financial situation. It detects…
Q: Total utility (units) 0 10 11 12 13 14 15 16 17 18 19 20 21 Wealth (thousands of dollars) John's…
A: Expected value refers to the possible value of a certain event. The value is determined based on the…
Q: a. b. C. Draw the annual migrant labor market diagram for this case. Label the relevant prices and…
A: The labor market is the marketplace where the workers who are willing and able to work at the…
Q: Today (t=0), you invested the starting principal of $1234. At the end of the first, second, and…
A: Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or…
Q: Labor Market Y = α (5N – 0.0025N2), where α = 2; N = labor The supply of labor, NS is NS = 55 +…
A: Note: Since you have posted a question with multiple sub-parts, we will provide the solution only to…
Q: There are several books that cover important information to validate the fact that LOCAL government…
A: Taxation is the cycle by which a government or other taxing power powers a financial charge or duty…
Q: Consider a game between player A with a choice between moves d₁, d₂ and d3, and player B with a…
A: Note: Since you have posted multiple questions, we will provide the solution only to the first…
Q: Which of these terms is t Probability wei Symmetry betw Value maximisa Oa. O b. O c. O d. Reference…
A: Prospect theory is a behavioral economic concept that explores how individuals make decisions under…
Q: Consider the market shown in the figure. Compute the consumer surplus at the equilibrium price and…
A: Consumers surplus is the difference between the highest price a consumer is willing to pay and the…
Q: Suppose that investment spending decreases by $300 and no leakages occur except household saving.…
A: This can be defined as a concept that shows the total amount of demand for the commodity and…
Q: Attempts 0.5 3. Tariffs Suppose Bangladesh is open to free trade in the world market for oranges.…
A: Consumer surplus is the area above the price line and below the demand curve. Producer surplus is…
Q: tacit collusion breaks down and prices collapse, the result is: a price war. formation of a cartel.…
A: Under the tacit collusion, firms do not form collusion through formal agreements. Instead, these…
Q: search The opportunity cost of the first 150 km of highway construction is the and rescue…
A: The opportunity cost is the cost of the next best alternative use. The trade-off between the goods…
Q: The table sets out the data for an economy when the government's budget is balanced. If the…
A: The market for loanable funds embodies the interplay between those who save and those who borrow,…
Q: The graph shows the schedule for hours of tutoring in economics. Price (per hour of tutoring) $250…
A: Total surplus, also known as economic surplus or social surplus, represents the overall benefit or…
Q: On the following graph, shift the curve or drag the blue point along the curve, or do both, to show…
A: Phillips curve shows relationship between the rate of unemployment and the rate of inflation That…
Q: KE Ann cuently produces cookies and bread at point A in the graph Use the graph to complete the…
A: The graph that shows the combinations of two goods that an economy can produce with the available…
Q: Mary Purchales a $500 bond that has 6 remaining Sem!- annual 6%. coupon payments for $450. what…
A: The coupon payment is an interest payment to a bondholder. It is computed as interest on the bond…
Step by step
Solved in 3 steps
- 7. Assume that the economy is initially operating at the natural level of output. An increase in consumer confidence will cause. A) a reduction in the real wage in the medium run. B) an increase in the real wage in the medium run. C) no change in the real wage in the medium run. D) ambiguous effects on the real wage in the medium run. E) none of the aboveSuppose that the economy's long-run output level is produces accourding to the following production funciton: Y= AK^1/2L^1/2 (will attach picture of the function) and that A = 5, K = 400 and L = 100 A. What is the economic meaning of the powers of K and L? B. What is the level of output ? produced when the economy in long-run equilibrium. C. Suppose that aggregate demand in the economy is described by the following equation:Y^d = m/kP Where M is the money supply, P is the price level and k = 1/V (velocity of money). Explain carefully where this equation is derived from and its interpretation D. Suppose that M = 2000 and that k = 2. What is the price level P at which the economy is in long-run- equilibrium? Plot such an equilibrium on a diagram with P on the vertical axis and Y on the horizontal axis, by distinguishing between the short-run and the long-run equilibrium. E. Now suppose that starting from the equilibrium of (b) and (c), the Central Bank increases M to 3000. Calculate…With COVID 19, the economy is experiencing unprecedented territory; businesses have to accommodate workers and customers for their safety with personal protective gears, and social distancing, such as limit the number of customers. In the meantime, many consumers are cutting their spending due to negative news, such as temporary pay cuts and economic uncertainty in near future. a. With the given information, what'd happen to the economy in short run? b. And what'd happen to the economy in long run, specifically, explain how long run adjustment occurs. State a new equilibrium price level and output in the economy and explain why using module 5. Aggregate Demand and Aggregate Supply. (It is assumed that the economy was initially in long run equilibrium and everything else stays constant.)
- (a) Suppose the price level in an economy rises while the money wage rate remains constant. What happens to the quantity of real GDP supplied. How will this affect the aggregate supply or aggregate demand curve? What if the potential GDP increases? Which aggregate curve is affected and how? (b) Real GDP Consumption Planned Investment Government Purchases Net Exports $1,000 $1,000 $100 $150 -$50 2,000 1,900 100 150 -50 3,000 2,800 100 150 -50 4,000 3,700 100 150 -50 From the table data provided, answer the following questions. The numbers in the table are in billions of dollars. Show all calculations. a. What is the equilibrium level of real GDP? b. What is the Marginal Propensity to Consume? c. What is the multiplier value in this economy? d. If potential GDP is $4,000 billion, is the economy at full employment? If not, what is the condition of the economy? e. If the economy is…Instructions: Enter your answers as whole numbers. A) What are the equilibrium price level and the equilibrium level of real output in this hypothetical economy? Is the equilibrium real output also necessarily the full-employment real output? B)If the price level in this economy is 150, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? If the price level is 250, will quantity demanded equal, exceed, or fall short of quantity supplied? By what amount? C) Suppose that buyers desire to purchase $ 200 billion of extra real output at each price level. What are the new equilibrium price level and level of real output?Refer to the following figure 1. For this economy, if the actual price level exceeds theexpected price level, how much output will the economyproduce in the short-run? A)$17 trillionB)$17.2 trillionC)$16.7 trillionD) Both A and C.2. Given the situation in part (a), this economy wouldexperience A) a recessionary gap of $0.3 trillionB) an expansionary gap of $0.2 trillionC) neither a recessionary gap nor an expansionary gap.D) an expansionary gap of $17.2 trillion. 3. Given the situation in part (a), in this economy (circlethe letter representing the right answer below)A) the actual rate of unemployment would be less than thenatural rate of unemployment.B) the actual rate of unemployment would be above the naturalrate of unemployment.C) the actual rate of unemployment would be equal to thenatural rate of unemployment.D)none of the above.4. In this economy, given the situation in part (a), in thelong-run (circle the letter representing the right answerbelow)A) the nominal wage…
- Assume that output began at its natural level. By drawing using AD-AS (Upward sloping) and Philips curves (graphs), analyze the short and long-run effects for these solutions. The government decreases the investment tax credit in order to discourage investment-My lecturer said it does not involve the movement of AS. so does it mean Philips curve graph along move along the curve ?Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment spending initially rises by $20 billion for every 1 percentage point fall in the real interest rate. Also assume that the economy’s multiplier is 4. a. If household wealth falls by 5 percent because of declining house values, and the real interest rate falls by 3 percentage points, in what direction and by how much will the aggregate demand curve initially shift at each price level?Assume that (a)the price level is flexible upward but not downward and (b) the economy iscurrently operating at its full-employment output. Other things equal, how willeach of the following affect the equilibrium price level and equilibrium levelof real output in the short run?· An increase in aggregate demand.· A decrease in aggregate supply, with no change in aggregatedemand.· Equal increases in aggregate demand and aggregate supply.· A decrease in aggregate demand.· An increase in aggregate demand that exceeds an increase inaggregate supply.
- 18 - : If aggregate demand increases in an economy while aggregate demand is constant in the short run, which of the following statements is correct for the new equilibrium point?A) price decreases and national income increasesB) price rises national income risesC) price increases and national income does not changeD) price goes up and national income goes downE) price decreases and national income decreases.19 - : In which of the following expressions is the equation of change given correctly?A) MV=VK B) MT=PV C) MV=PT D) MP=VY E) MV=P1-What is the general relationship between a country's price level and the quantitiy of it's domestic output (Real GDP) demanded? Who are the buyers of real US GDP? 2- what assumptions cause the immediate -short-run aggregate supply curve to be horizontal? why is the long-run aggregate supply curve vertical? Explain the shape of the short-run aggregate supply curve . Why is the short-run curve relatively flat to the left of the full employment output and relatively steep to the right ? 3- why does a reduction in aggregate demand tend to reduce real output, rather than the price level? 4- Explain" unemployment can be caused by a decrease of aggregate demand or a decrease of aggregate supply ."In each case , specify the price level outcomes . 5- In early 2001 investment spending declined in the USA. In the 2 months follwing september , 11 2001 attacks on the US, consumption also declined . Use Ad-AS analysis to show the two impacts on Real GDP. 6- Using the concept of the multiplier ,…Trace with a diagram the path of output and the price level (in logarithms) after an autonomous expenditure increase. (Assume that pₑ = P-1 and that the closed economy was initially at the medium run equilibrium level of output).