Which of these can create an output gap: i) High inflation ii) Low inflation iii) Full employment iv) Unemployment v) Inadequate government regulations O i, iv and v O i, i and v O i and v O iv and v
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- Suppose I lend my friend Peter $100 for one year, and he agrees to repay me with interest. We each have an expectation that the inflation rate over the coming year will be 5 percent, and so we agree that he will pay me back at a nominal rate of 7 percent interest. a) What real rate of return do I expect to receive? b) What happens if inflation turns out to be 8 percent over the year? Who is made better off and who is made worse off? c) What happens if inflation turns out to be 3 percent over the year? Who is made better off and who is made worse off?Suppose that lenders want to receive a real rate of interest of 5 percent, and that they expect inflation to remain steady at 2 percent in the coming years. Based on this, lenders should charge a nominal interest rate of: Group of answer choices A) 7% B) 2.5% C) 10% D) 3%An economy has an unemployment rate of 11% and real GDP grows by 2.5% annually. A treasury official says next year's expected growth rate of 4% is ecpected to bring down the enemployment rate to 8% within one year. However, an economists disagrees as it is non consistent with macroeconomic research. -who is correct? the treasury official or the economist and why?
- I just need assitance and a better understanding of 3 and mostly 4 1. Another economy has the production Y = A * K^0.5 * L^0.5, the marginal product MPL = 0.5 * A * K^0.5 / L^0.5, in which K = 144 and the supply of labor w = 5 * EP/P *L^0.5 Productivity is A=50. In absence of shocks and policies, EP/P=1, the number of jobs is L = 60, and wage is w = 38.73. But now inflation is slower than expected, with EP/P=1.2. Find the new equilibrium number of workers. 2. Find the new equilibrium wage at EP/P=1.2 3. Graph the change in the labor market equilibrium. Mark the before and after equilibria with E0 and E1. Label axes and curves, map relevant values onto axes. 4. Now let's consider this same scenario in terms of the accelerationist Phillips curve. The labor force is N=64. Find the rates of unemployment before and after as (N-L)/N and map them into our surprise inflation indexes, EP/P. Label the natural rate of unemployment, show the cyclical rate of unemployment. Step 1:…Continue using the same environment for this question: Sheila lives for two periods. She earns $100 in the first period and $110 in the second period. She wants to consume exactly the same amount in both periods. The interest rate at which she can save and borrow is 10%. There is no inflation. Which of the following statements is true? A. Sheila’s lifetime consumption is greater than her lifetime income B. Sheila’s lifetime consumption is lower than her lifetime income C. Sheila’s lifetime consumption is equal to her lifetime income 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.c. According to the Keynesian theory, what would be the effect of the “A wave of investor and consumer pessimism about the future profitability of capital investments and lower future income” on output (Y), the real interest rate (r), employment (L) and the price level (P)? Distinguish between the short run and the long run effects by using the IS-LM-FE and AD-AS models and the effective labor demand theory.
- Two main macroeconomic concerns are the problems of inflation andunemployment.a. What are the social costs of inflation? Explain TWO of them? b. What is natural rate of unemployment? Explain the TWO main causesof natural rate of unemployment. With reference specifically to ONEof these causes, suggest ONE practical government policy that reducesthe natural rate of unemployment.“It’s true that unexpected inflation redistributes wealth, from creditors to debtors, for example. But what one side of the bargain loses, the other side gains. So from the perspective of the society as a whole, there is no real cost.” Do you agree? Discuss.Which one of the following statements is INCORRECT? A Keynesian economists believe that the business cycle is caused by external factors, such as governmentinterference in the economy.B Classical economists believe that market economies are inherently stable and fluctuations are ascribed toexogenous factors.C Classical economists believe that government should not intervene in the economy to try to smooth out thebusiness cycle.D Structuralist economists believe that the market system is neither inherently stable norsystematically unstable . Consider the case of two countries, Afghanistan and the US, both producing carpets and fighter aircraft.The table below shows output rates per day in the two countries if all resources are fully and efficientlyemployed. Use this information to answer the question.Carpets Fighter aircraftAfghanistan 100 4US 500 25An appropriate international exchange ratio that would allow mutually advantageous trade to takeplace would be: A 1 aircraft = 25 carpets.B…
- Please explain and answer all this is my last question. Tick the correct alternative(s): Choose one or more: a. Inflation is an economic maladjustment that is reflected in a process of generalized price increases for products and services.services and affects each sector of the economy differently.b. With inflation, your money loses value because you need more to buy the same basket.c. The most recommended method for analyzing problems involving Average Rate of Attractiveness varying over time is Net Present Value (NPV).d. The inflation index is nothing more than a relationship between price indexes at two different time points, and you should choose a price index that adequately reflects the general behavior of the economy.e. Inflation complicates financial market operations by introducing an uncertain forecast component.Please no written by hand (a) Inflation and unemployment are the twin evils bedeviling the economy. Discuss the relationship between these two macro-economic problems.Assume that the total productivity in our country decreases (a negative shock to the production function). a) Using a graph, What happens to the demand curve for labor? b) Using a graph, How would the decline in productivity affect the labor market (employment, unemployment and real wages), if labor market is always in equilibrium? c) Using a graph, How would decreases in productivity affect the labor market if unions prevented the decline in real wages?