What does the Philip curve model mean when it's at an equilibrium?

Q: Would it make sense to argue that rational expectations economics is an extreme version of…

A: As per the definition, the neo classical theory is based on the assumption that people have rational…

Q: Suggest solutions to the three major weaknesses of the New Classical Theory.

A: New classical approach Was developed by the Robert Lucas ,  T . sergent  etc and they attempted to…

Q: Given that the Mundell-Fleming model is one of the innovations of neoclassical economics (covering…

A: The basic Mundell-Fleming model, like the IS-LM model, is based on the fixed price level assumption…

Q: What are differences of the Mundell Fleming Model in the short run as oppose to in the long run

A: the mundell flemming model, also known as the IS LM Bop model (IS-LM-BP model) in an economic model…

Q: How are Milton Friedman’s theories a critique/response to Keynes’ theories?

A: Milton Friedman advocated for a free market economy with minimal government intervention.Friedman,…

Q: According to the lectures, which of the following ideas are representative of (neo)classical…

A: According to neoclassical theory, a firm's level of investment should be determined solely by its…

Q: how does distortion affects the financial and economic values of the tradable and non-tradable goods

A: Market distortion: It refers to the increase prices of the goods and services. It is basically the…

Q: Why might policymakers be tempted to renege on an announcement they made earlier? In this situation,…

A:

Q: A problem with money models is that in fact there is more than one kind of money; economists do not…

A: Commercial money, fiduciary money, fiat money, and commodity money are the four categories of money…

Q: 1. At the end of the future period, in the real intertemporal model with investment: A) Group of…

A: At the end of the future period, in the real intertemporal model with investment.

Q: Why is it helpful to model the policy process?

A: Policy refers to the action or a principle proposed by the directing or controlling authority to…

Q: Which of the following individuals is NOT associated with the school of Modern Monetary Theory?…

A: Modern Monetary Theory or Modern Money Theory (MMT) is a heterodox macroeconomic theory that depicts…

Q: What is the main advantage and disadvantage of an unconditional policy commitment?

A: The unconditional policy commitment represents an un-spoken assurance by the central bank, which…

Q: What kind of policy is this? Discuss the effects of this policy proposal if it was in place as the…

A: Fiscal policy is when the government manipulates the spending and the taxes to manage the economy,…

Q: Why might a price "freeze" help monetary policy to succeed.

A: An increase in the money supply is called a monetary expansion. In the short run when prices are…

Q: Why should monetary policy and fiscal policy be separately?

A: Fiscal policy: This is the government policy or tool by which it influences the country’s economy…

Q: how would you describe the partisan model with regards to monetary policy

A: A partisan is a member of a political party or army who is fully committed to their cause. The…

Q: Describe the Chadwick report.

A: Edwin Chadwick, in 1842 published a report considering the labor population of Great Britain for the…

Q: What is the elite/mass theories of policy formulation and implementation

A: Elite theory is a state theory that aims to define and explain modern society's power dynamics. The…

Q: Draw a graph of disequilibrium analysis, where there is a shortage or excess demand and a hike in…

A: Equilibrium is achieved in the market where quantity demanded by consumer matches the quantity…

Q: What are the limitations of using the representative agent and rational expectations model as the…

A: Both the models of rational expectations and that of a representative agent bring fractions of…

Q: Briefly discuss the aggregate supply curve in the neoclassical model, including how the curve is…

A: Neoclassical assumes that over the end of the day , aggregate supply is vertical. or vertical level…

Q: What is monetary policy?

A: Monetary policy is the policy adopted by the central bank of a country to control the money supply…

Q: What effects does the Federal Reserve have on the economy? Select the three correct answers.:…

A: Federal Reserve uses monetary policies in order to manage the economy

Q: What happens in the AD-AS model when the Federal Reserve buys government securities?

A: Federal reserve is responsible for conducting monetary policy in an  economy. Open market operation…

Q: State algebraically and explain each of the components of the 3-equation model for macroeconomic…

A: The main aim of macroeconomic policy is to stabilize the economy and promote sustainable economic…

Q: Read the following premise carefully and answer the questions specifically and in detail. You must…

A: Answer: Monetary policy: Monetary policy is undertaken by the monetary authority (Central bank) of a…

Q: If the production conditions in the United States and Japan were to become essentially the same,…

A: There is no incentive for trade in the Classical Ricardian analysis since the trade price ratios in…

Q: Using graph and words, explain the Ricardo-Barro effect.

A: The economies around the world operate on the basis of the expenditures, and the spending done by…

Q: According to Keynesian economists, if people in the economy are not spending enough then the…

A: Keynesian the served the deserving value to the demand side of the economy when it comes influencing…

Q: Analyze monetary policy in order the generate macroeconomic stability

A: Introduction The central bank attempts to preserve price stability by limiting the amount of money…

Q: Please draw and fully label a Philip curve model

A: The economics as a study is based upon the idea that the resources which are available with the…

Q: State the main features of the monetary model. Use the model to analyse the impact of an…

A: By monetary model, we have to understand the meaning of LM (Loanable funds market) in the IS-LM…

Q: Can you show me a graphical representation of an IS-PC-MR model under the New Keynesian Philips…

A: In economics, macroeconomics refers to the study of the policies and fiscal measures which helps in…

Q: there any scope in this model for the policy authorities to influence the output through systematic…

A: The probability that an event at the firm level will cause serious instability or the collapse of a…

Q: Consider a closed economy where the goods and money markets are described by the following…

A: Since the question you have posted consists of multiple parts, we will answer part (c) and its…

Q: Consider the money market model. If the current price is higher than the equilibrium price, would…

A: When considering the money market model the following questions can be answered as follows:

Q: Given that the Mundell-Fleming model is one of the innovations of neoclassical economics, do the…

A: The Mundell-Fleming model demonstrates that, under a flexible exchange rate environment, fiscal…

Q: Compare the assumptions of the Heckscher-Ohlin model to that of the Ricardian model.

A: In the international trade. we study how trade takes place between the countries and why countries…

Q: Is the demand for money function stable over time?

A: The demand for money (Md) is highly dependent on factors like investment, rate of interest,…

Q: Suppose that the oil price sharply increased for a while, which increased production costs, causing…

A: In the goods market with AD-AS model, the increase in oil price implies an increase in the cost of…

Q: What would monetary policy look like according to a 'policy mix'?

A: The economies around the globe work with the objective, and goals of increasing their economic…

Q: With COVID-19, many economies suffered from severe recession. To save their economies, a mix of…

A: Monetary policies are the tools of Central Bank of the country while the fiscal policies are the…

Q: According to you what is the difference between Ricardian Model and the HeckscherOhlin (HO) model?

A: The Ricardian model and Heckscher Ohlin model are two models that explain the theory of comparative…

Q: If an economy was in deep recession what type of demand-side policy would be most effective when the…

A: If the economy is in deep recession, the government need to increase the real GDP by a higher…