1. With the aid of graphsexplain the effect of contractionarymonetary policy on the level of output,...

1. With the aid of graphsexplain the effect of contractionarymonetary policy on the level of output, prices, and interest ratesfor (i) the Keynesian AS-curve case, (ii) the classical AS-curve case, and (iii) the intermediate case.

2. Use theAD/AS graphical frameworkto show the effect of expansionaryfiscal policy on the level of output, prices and the interest rate in the short run and the long run.

Expert Solution

Rahul Sunny answered 1 year ago

1. With the aid of graphs explain the effect of contractionary monetary policy on the level...

1. With the aid of graphs explain the effect of contractionary monetary policy on the level of output, prices, and interest rates for (i) the Keynesian AS-curve case, (ii) the classical AS-curve case, and (iii) the intermediate case. 2. Use the AD/AS graphical framework to show the effect of expansionary fiscal policy on the level of output, prices and the interest rate in the short run and the long run

Question 1 a) Explain the effect on the equilibrium interest rate and output level of an...

Question 1 a) Explain the effect on the equilibrium interest rate and output level of an increase in the real money supply, state if this is an contractionary monetary or fiscal policy and show the effect graphically. fully label the graph (10) b) Explain the effect on the equilibrium interest rate and output level of a decrease in taxation. State if this is an expansionary or contractionary monetary or fiscal policy and show the effect graphically. (10)

1. If the federal reserve pursues a contractionary monetary policy, output and the price level will...

1. If the federal reserve pursues a contractionary monetary policy, output and the price level will change in which of the following ways in the short run? A) Output – Increase; Price Level - Increase B) Output - Increase; Price Level - No change C) Output - Increase; Price Level - Decrease D) Output - Decrease; Price Level - Decrease E) Output - Decrease; Price Level - Increase 2. To counteract a recession, the Federal Reserve should buy securities on...

3. Suppose a country's output is above the policy makers' desired level of output and is...

3. Suppose a country's output is above the policy makers' desired level of output and is experiencing a trade deficit. Assume that the policy makers' goals are to achieve the desired level of output (i.e., natural level of output) and balanced trade. Suppose we do not consider the impact of expectations, answer the following questions. (Hint: using the ZZ and NX curves) . a) Is it possible to use fiscal policy to achieve these two goals simultaneously? What kind of...

What is the long-run effect of the increased taxation on output and the price level?

Illustrate and explain what will be effect of an expansionary monetary policy on output and price...

Illustrate and explain what will be effect of an expansionary monetary policy on output and price in short run and long run, under fixed vs floating ecchange rate regime and perfect capital mobility? Use IS-LM and AD-SRAS-LRAS diagrams to answer this question.

Q2. Fiscal policy, like Monetary policy, cannot change the natural level of output. Why then is...

Q2. Fiscal policy, like Monetary policy, cannot change the natural level of output. Why then is MP considered neutral but FP is not?

Suppose that expansionary monetary policy had no effect whatsoever on employment or output in either the...

Suppose that expansionary monetary policy had no effect whatsoever on employment or output in either the short or long run; that is, suppose that monetary policy only affected the price level. And, suppose further that everyone understood this to be true. Would the central bank be more or less vulnerable to the time-inconsistency trap in this case? Please defend your reasoning.

1. (a) Describe the photoelectric effect with the aid of a clearly labeled diagram showing an...

1. (a) Describe the photoelectric effect with the aid of a clearly labeled diagram showing an apparatus. (b) Derive an equation from conservation of energy for the stopping potential in terms of the frequency of the incident light and the work function for the material. Define variables used. (c) Describe an observation for the photoelectric effect that can’t be explained using classical physics. (1 mark) (d) The work function for a certain metal is 1.8 eV. What is the stopping...

d) Explain the effect of an expansionary monetary policy on real physical output, employment and inflation...

d) Explain the effect of an expansionary monetary policy on real physical output, employment and inflation given that economy in Zambia is operating at potential output level. [6 Marks] e) Use the aggregate demand and the 45-degree line to represent equilibrium in the goods market. Make sure to include intercept, and slope in your graph. Further assume that interest rates decrease, show the effect of decreased interest rates on equilibrium income. Explain the stage economy goes through in moving from...

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