Use the standard AD/AS model augmented with financial shocks to
answer the following questions:
a) Show the effect of an increase in credit spreads due to the
failure of a large financial institution. What happens to output
and inflation in the short-run? What happens in the long-run?
b) Suppose that a financial crisis makes it difficult for firms
to finance R&D expenditures. What effect might this have on
potential output? Why?
c) Show graphically the effect of a financial crisis...
Answer the following questions about AD, SAS, and LAS:
a) What does the AD curve show? (Hint: What is true at every
point along the AD curve?)
b) Does the SAS curve slope upward or downward? Why is it sloped
that way? Explain.
c) Predict, with the aid of the IS-LM and the SAS-AD models, the
short-run and long-run results when consumer optimism increases.
Assume the economy is initially in long-run equilibrium at the
natural real GDP.
** Make sure...
For each of the following situations, show how (if at all) the
IS, MP, and AD curves are affected. Show clearly any shifts or
movements along the curves. If there is no change, just type “No
change in …”
a. A decrease in financial frictions
b. An increase in the current inflation
c. Firms become more optimistic about the future of the
economy
d. An autonomous monetary policy tightening occurs
e. An increase in taxes and an autonomous easing of...
Q6. There is a decrease in AD. Show on an AD/AS diagram the
effect on output and prices in the short-run. State the effect on
prices, output, unemployment, and wages next to the diagram. Assume
we start at Qs
Q7. There is a decrease in the cost of an input into the
production of many goods. Show on an AD/AS diagram the effect on
output and prices in the short-run. State the effect on prices,
output, unemployment, and wages next...
Please answer the following questions (Show procedure) ....
Thank you.
1. Calculate the cutoff frequency of an active first order
low-pass filter with an R1 = 12kOhm and C1 = 0.02 uF.
2. Calculate the cutoff frequencies of a bandpass filter circuit
with R = 10 kOhm, C1 = 0.1 uF and C2 = 0.002 uF.
For each of the following, use the AD-AS diagram to show the
short-run and longrun effects on output and inflation
(assuming “self-correction”, i.e. no “stabilization
policy”). Assume that the economy starts in long-run
equilibrium.
a) The government reduces taxes.
b) The Fed tightens monetary policy.
c) Oil prices drop sharply and unexpectedly.
1. In the AS-AD model, show graphically what would happen to the
US economy in the short-run and in the
long-run if aliens doubled the amount of capital in our economy.
Label the initial long-run equilibrium with A,
the short-run equilibrium with B, and the new long-run equilibrium
with C.
P on the Y-axis; and Y on the X-axis.
2. In the AS-AD model, show graphically what would happen to the US
economy in the short-run and in the
long-run...
The Standard Conversion Factor (SCF) despite simple to
calculate considered an arbitrary and conversion factor to
calculates shadow prices Briefly mention why?