Question

In: Economics

Using Gretl, derive the potential output trend for the economy of your choice. Indicate the periods...

Using Gretl, derive the potential output trend for the economy of your choice. Indicate the periods of inflationary/deflationary gaps

Solutions

Expert Solution

Rahul Sunny answered 1 week ago
Next > < Previous

Related Solutions

Consider an economy that is at potential output. Using the aggregate demand curve and the inflation...
Consider an economy that is at potential output. Using the aggregate demand curve and the inflation adjustment line, describe what would happen to real GDP and inflation in the short run, in the medium run, and in the long run if the government cut spending on defense. Be sure to provide an economic explanation for your results.
Consider an economy that is at potential output. Using the aggregate demand curve and the inflation...
Consider an economy that is at potential output. Using the aggregate demand curve and the inflation adjustment line, describe what would happen to real GDP and inflation in the short run, in the medium run, and in the long run if the government cut spending on defense. Be sure to provide an economic explanation for your results.
Consider an economy that is operating at its potential GDP (that is, GDP is on trend)...
Consider an economy that is operating at its potential GDP (that is, GDP is on trend) and the inflation rate is equal to the target rate. Suppose there is a shock to Australian imports; specifically, Australian consumers increase their imports of Chinese manufactured goods as they are perceived to have even greater value than before while at the same time maintaining their imports from other countries. (a) Describe what happens in the economy in the current period using the standard...
Using the AD-AS diagram, draw an economy in long run equilibrium. Indicate output and price level...
Using the AD-AS diagram, draw an economy in long run equilibrium. Indicate output and price level as Y1 and P1. Suppose a pandemic is affecting the economy and the Federal government invests heavily in diagnostic and anti-body testing, increasing government purchases by 10 billion. Indicate the effect on the economy using your diagram. Remember, decide which curve shifts and which direction. Indicate the new equilibrium with Y2 and P2. In words, what happens to the economy given the increase in...
indicate whether the sample is biased or unbiased and explain your choice using your own words...
indicate whether the sample is biased or unbiased and explain your choice using your own words and in complete sentences. In some cases, it may be appropriate to answer "not sure" because there is insufficient information to make a judgement. In these cases, if any occur, describe any additional information that you would like to have before deciding whether is biased or unbiased. In each of these excerpts, it is important to realize that you cannot assume that a sample...
Suppose your economy resides at long‐run potential output but concerns arise that the birth rate is...
Suppose your economy resides at long‐run potential output but concerns arise that the birth rate is too low to support retired workers on fixed social security payments. Suppose further that technology growth is insignificant. If population is allowed to rise through immigration, what happens to the long‐run aggregate supply curve, prices and interest rates? What could happen to the LR supply curve, prices and interest rates if immigration remained restricted?
Suppose your economy resides at long‐run potential output but concerns arise that the birth rate is...
Suppose your economy resides at long‐run potential output but concerns arise that the birth rate is too low to support retired workers on fixed social security payments. Suppose further that technology growth is insignificant. If population is allowed to rise through immigration, what happens to the long‐run aggregate supply curve, prices and interest rates? What could happen to the LR supply curve, prices and interest rates if immigration remained restricted?
The recession has meant that the actual output of the Australian economy is below the potential...
The recession has meant that the actual output of the Australian economy is below the potential output. The government has already introduced policy measures as you have identified above to boost aggregate demand (AD) and cover the output gap. However, from lecture 7 (Chapter 15) we can conclude that the road to economic recovery in Australia and mitigating the current output gap also requires policies to shift the short-run aggregate supply (SRAS) to the right. Discuss two of the distinct...
a. Suppose an economy was originally operating at potential output. Unfortunately, a pandemic outbreak caused the...
a. Suppose an economy was originally operating at potential output. Unfortunately, a pandemic outbreak caused the stock market to crash. In face of such stock, describe how activist monetary policy makers would respond to stabilize the economy. Explain your answer with an aggregate demand-aggregate supply diagram. b. Nonactivists argue that government action is unnecessary to eliminate the fluctuations in the economy caused by the stock market crash. Justify their argument.
Suppose in an economy which is producing at its potential output, the central bank decides to...
Suppose in an economy which is producing at its potential output, the central bank decides to implement an expansionary monetary policy. Using the AD-AS model, explain the effect that this policy will have in the short run, and in the long run. Illustrate your answer with a diagram.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT