Goods Market: C=50 + 0.8(Y-T) Money Market: M/P=490 I=120-400r L(r,y)=.5y-100r G=110 T=50
a. What are the IS and LM equations? Calculate and show graphically the equilibrium output and interest rates?
b. Suppose there is an increased risk in the financial markets changing money demand by 50 units (add or subtract 50 from money demand). Calculate the SR and LR.
c. If the Federal Reserve wanted to stabilize the economy while at the SR equilibrium what policy would they need to conduct? Show this graphically and calculate how large of a policy they would need to conduct.
d. If the Government wanted to stabilize the economy while at the SR equilibrium what three policies could they conduct? Show this graphically and calculate how large of each of the policies would need to be. How different are these policies from what would have been suggested from the Fiscal Multipliers that were learned in introduction to macro?
In: Economics
Question 36 1 pts
Assuming variable output prices, a decrease in aggregate demand will decrease (HINT: AS curve is upward sloping)
Group of answer choices
the price level & increase the real domestic output.
both real output & the price level.
the real domestic output & no impact on the price level.
the price level & have no effect on real domestic output.
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Question 37 1 pts
A leftward shift of the AS curve:
Group of answer choices
would increase output supplied at all price levels.
could be caused by an increase in the overall price level.
would result in both a higher price level and a lower level of output
could be caused by a decrease in input prices (a positive supply shock).
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Question 38 1 pts
A leftward shift of the AS curve is often associated with:
Group of answer choices
the stagflation of the 1970's.
demand-pull inflation of the "Vietnam era" of the 1960's.
the stock market crash of 1987.
the Great Depression.
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Question 39 1 pts
The inexplicable disappearance of the typically abundant harvest of anchovies off the coast of Peru contributed to the stagflation of the 1970's.
Group of answer choices
strange, but true
oh, c'mon, now you're just making things up: false
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Question 40 1 pts
Which of the following is not a tool of fiscal policy?
Group of answer choices
taxes
the money supply (more specifically, interest rates).
government purchases
unemployment insurance
All are "tools of fiscal policy."
In: Economics
Question 31 1 pts
The Pigou-Wealth effect indicates that
Group of answer choices
a lower price level will increase the real value of financial assets and therefore increase spending.
a decrease in the overall price level would shift the AD curve leftward
a higher price level will increase the real value of financial assets and therefore increase spending
an increase in the overall price level would shift the AD curve leftward
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Question 32 1 pts
The Keynes-Interest Rate effect suggests that
Group of answer choices
a lower price level might lead to a reduction in the demand for money resulting in a fall in the rate of interest, the result will be a movement down the AD curve.
lower prices and, therefore lower interest rates would cause the AD curve to shift left.
higher prices and, therefore higher interest rates would cause the AD curve to shift.
the above scenario- lower prices, lower interest rates- would result in a movement up the AD curve.
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Question 33 1 pts
Which one of the following would not shift the AD curve?
Group of answer choices
a change in government expenditures (G).
a change in household expectations about employment/income
a decline in the price level.
a change in interest rates
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Question 34 1 pts
The (short-run) aggregate supply (AS) curve:
Group of answer choices
is down sloping because real purchasing power increases as the price level falls.
shows the various amounts of output which firms wish to supply at each price level.
contains a vertical range where output is variable and prices are constant.
Is explained by the Keynes, Pigou and Foreign Purchases effects.
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Question 35 1 pts
The equilibrium price level and level of real output (GDP) occur where:
Group of answer choices
the AD and AS curves intersect.
real output is as high as possible.
the price level is at its lowest level possible.
exports equal imports.
In: Economics
what are the implicit and explicit cost associated with introducing a new product ? what is the total cost associated with this venture and what happens to this cost in short and long run production?
In: Economics
Based on your knowledge of the current status of the Pandemic, and the numerous reported progress on solutions to fight it, make a forecast of the tourism sector. Specifically, use the Scenario Writing Method, write ONE (1) mini probable OPTIMISTIC scenario forecast of the tourism sector a year from now (2021)
In: Economics
Newfoundland’s fishing industry has recently declined sharply
due to overfishing, even though fishing companies were supposedly
bound by a quota agreement. If all fishermen had abided by the
agreement, yields could have been maintained at high levels.
Model this situation as a prisoner’s dilemma in which the players
are Company A and Company B, and the strategies are to keep the
quota and break the quota. Suppose that if both companies keep the
quota, then each receives a payoff of $100, and if both break the
quota, then each receives a payoff of $0. On the other hand, if one
of the companies breaks the quota and the other keeps the quota,
then the company that breaks the quota receives a payoff of $150,
and the company that keeps the quota receives a payoff of -$50.
Instructions: Enter the players' payoffs in the
payoff matrix below. Be sure to include a negative sign (-) in
front of any negative numbers.
Company A |
Keep quota Break quota |
Company B
|
What is the dominant strategy for both companies?
Break the quota. | |
Neither company has a dominant strategy. | |
Keep the quota. |
In equilibrium, what is each company's payoff?
Each company will receive a payoff of $0. | |
Company B will receive a payoff of $150, and Company A will receive a payoff of -$50. | |
Each company will receive a payoff of $100. | |
Company A will receive a payoff of $150, and Company B will receive a payoff of -$50. |
Relative to the equilibrium outcome, both companies would be better off if they (Click to select)both kept the quotaboth broke the quota.
In: Economics
On the planet Homogenia every consumer who has ever lived consumes only two goods, x and y, and has the utility function U( x, y) = xy. The currency in Homogenia is the fragel. In this country in 1900, the price of good 1 was 1 fragel and the price of good 2 was 2 fragels. Per capita income was 108 fragels in 1990. In 2000, the price of good 1 was 3 fragels and the price of good 2 was 4 fragels and per capita income increased to 120
a. The quantity of x that's consumed in 1990 and 2000 are: ______ and _______respectively
b. The quantity of y that's consumed in 1990 and 2000 are: ______. and ______ respectively
c. The Laspeyres quantity index for the quantity level in 2000 relative to the price level in 1900 is. ___________ (rounded to 2 decimals)
d. The Paasche quantity index for the quantity level in 2000 relative to the price level in 1900 is ____________(rounded to 2 decimals)
e. The Laspeyres price index for the price level in 2000 relative to the price level in 1900 is _____________ (rounded to 2 decimals)
f. The Paasche price index for the price level in 2000 relative to the price level in 1900 is ___________ (rounded to 2 decimals).
In: Economics
Outline of current policy in China aimed at addressing GDP. Describe measures currently or previously attempted in the country to address the issue, and explain the impact of these on the population.
In: Economics
1. Explain what happens to the efficiency of free markets if:
a) There is market power exercised by buyers or sellers.
b) There are externalities
2. What is the relationship between a change in the size of a tax, and the change in the deadweight loss of the tax?
3. What is the best predictor of whether reducing a tax in a market will increase or decrease tax revenue? Explain.
In: Economics
Discussion
True or False and Why?
I would like you to evaluate whether the following statements are true or false. Also, please provide your reasoning to support your answers.
Absolute vs. Comparative Advantage
Suppose that U.S. has an absolute advantage in the computer
production compared to Germany, while Germany has an absolute
advantage in the auto production compared to U.S. This implies that
U.S. has a comparative advantage in the computer production and
Germany has a comparative advantage in the auto
production.
Production Possibility Frontier (PPF) vs. Consumption Possibility Frontier (CPF)
The Production possibility frontier is always the same as the consumption possibility frontier. (Hint: (Compared the case of no trade versus free trade)
Instructions
Please make your initial post by midweek, and respond to at least one other student's post by the end of the week.
In: Economics
a) Use the internet, library, or other information source to research imports and exports for any state or country in the world. Pick a country or state and discuss its import goods and export goods. You should include some dollar values or % of GDP figures
b) For the country you choose, discuss some possible sources of comparative advantage for that economy.
In: Economics
In: Economics
1.) Given the information below about Farmer Sally’s wheat crop, fill in the table below and calculate her economic profit or loss when the market price is $3 per bushel. Hint: Recall that MR = P under perfectly competitive conditions.
Bushels of wheat |
MR |
TR |
TC |
MC |
VC |
ATC |
AVC |
Economic Profit or Loss |
0 |
15.00 |
-- |
0 |
-- |
-- |
|||
1 |
4.75 |
|||||||
2 |
3.75 |
|||||||
3 |
3.00 |
|||||||
4 |
2.50 |
|||||||
5 |
2.00 |
|||||||
6 |
1.50 |
|||||||
7 |
1.25 |
|||||||
8 |
1.50 |
|||||||
9 |
2.00 |
|||||||
10 |
2.75 |
|||||||
11 |
3.25 |
|||||||
12 |
4.75 |
|||||||
13 |
6.50 |
|||||||
14 |
9.50 |
|||||||
15 |
13.50 |
|||||||
16 |
18.50 |
In: Economics
Determine whether each of the following cases is an example of 1)horizontal fdi 2) vertical FDI 3)offshoring. Explain your reasonings for each use. . IS THIS AN EXAMPLE OF HORIZONTAL FDI, VERTICAL FDI OR OFFSHORING
a) toyota motor corporation , a Japanese automative manufacturer. owns multiple manufacturing facilities in the US
.b) Apple Inc, an American technology company , hires Foxconn, a multinational electronics contract manufacturer, for assembling Iphones in China.
In: Economics