Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Question
Chapter 7, Problem 16CQ
(a)
To determine
Calculate the 1960 real GDP.
(b)
To determine
Calculate the 1960 real GDP.
(c)
To determine
Calculate the 1980 GDP deflator.
(d)
To determine
Calculate the 1990 nominal GDP.
(e)
To determine
Calculate the 2000 GDP deflator.
(f)
To determine
Calculate the 2009 real GDP.
(g)
To determine
Calculate the 2015 real GDP.
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The following graph shows the aggregate demand curve in a hypothetical economy. Assume that the economy's money supply remains fixed.
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a. Briefly explain under what conditions an expansionary monetary policy will indeed lower interest rates, both in the short and long run. A graph may help answering this question.b. Briefly explain under what conditions an expansionary monetary policy will increase interest rates. A graph may help answering this question.
Chapter 7 Solutions
Economics: Private and Public Choice (MindTap Course List)
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Similar questions
According to Keynes, what are the three reasons individuals hold money? Provide a brief explanation of each.
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Q8
Which of the following statements is consistent with a given (i.e., fixed) IS curve?
Select one:
a. A reduction in the interest rate causes money demand to decrease.
b. A reduction in the interest rate causes investment spending to increase.
c. An increase in government spending causes an increase in demand for goods.
d. A reduction in the interest rate causes an increase in the money supply.
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Explain how an increase in government expenditure can affect the goods market and moneymarket by taking the link between the two markets into account.
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Why do Keynesian economists believe increasing the money supply is a good idea? Use the equation of exchange in your answer.
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In one or two sentences, explain why Keynesian economists believe that increasing the money supply will be effective at increasing aggregate demand in the short run.
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Which of the following statements is true of the money supply?
a) Increasing the money supply is a way of warding off an economic downturn.
b) Decreasing the money supply is a way of warding off an economic downturn.
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d) The money supply is increased by raising taxes.
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If the Fed lowers interest rates, that is an example of
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Sylvia, a writer for a newspaper, interviewed top managers at 50 large corporations. All of the managers indicated that the primary determinant of planned investment is the interest rate and not their expected sales. In addition they all told her that their desired investment function is very flat. From this information, if Sylvia is a good macroeconomist, she would conclude that
Group of answer choices
neither expansionary nor contractionary monetary policy would be very effective.
both expansionary and contractionary monetary policy would be very effective.
fiscal policy would be very effective, but monetary policy would not be very effective.
fiscal policy would not be very effective, but monetary policy would be very effective.
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