Consider the AS-AD model of a closed economy.

a. Write down the expressions for the AS and AD curves and interpret the expressions: what is the intuition behind the two curves? What must be true of the model parameters and variables in the long-run equilibrium, i.e. in the steady state?

b. Analyse the effects of a supply shock that causes a temporary increase in inflation, using a diagram. Assume that the shock lasts for one period and then assumes the value zero. Describe the mechanisms that bring the economy back to long-run equilibrium. What happens to aggregate demand?

c. Consider an economy that starts out in steady state when the central bank decides to make the inflation target more ambitious. Analyse the effects of a decrease in the inflation target from ?̅ to ?̅′. Explain the mechanisms behind the adjustment to the new steady state.

d. How would the slope of the AS and AD curves be affected if we instead were to consider an open economy? No derivations are needed, but please motivate your answer.

( X, τ ) is normal if and only if for each closed subset C of X and each open
set U such that C ⊆ U, there exists an open set V satisfies C ⊆ V ⊆clu( V) ⊆ U

1. In a closed economy with no government, the equilibrium level of income is £22 billion, the full employment level of income is £25 billion. To reach full employment would require an injection of £1 billion. Explain how could the economy reach full employment equilibrium level of income £25 billion?

1. For each of them, identify whether the account is closed or not at the end of fiscal period.

• Allowance for Accounts Receivable

• Sales Revenue

• Unearned Revenue

• Bond Payable Discount

2. At January 1, 2019, Fuller Company had total assets of $900,000 and at December 31, 2019, its total assets were $1,100,000. Fuller’s net sales for 2019 were $850,000 and its 2019 net income was $55,000.

• Return on assets for 2019

• Profit margin (or Return on sales ratio) for 2019

• Asset turnover for 2019

A closed-end fund’s NAV is $78 at the beginning of the year and $84 at the end of the year. At the beginning of the year the fund was selling at a 2% premium to NAV, at the end of the year it was selling at a 2% discount to NAV. The fund paid year-end distributions of income and capital gains of $1. What is the rate of the return to an investor, who bought the fund at the beginning of the year? (Provide your answer in percent rounded to two decimals omitting the % sign)

A closed-end fund’s NAV is $25 at the beginning of the year and $39 at the end of the year. At the beginning of the year the fund was selling at a 3% premium to NAV, at the end of the year it was selling at a 2% discount to NAV. The fund paid year-end distributions of income and capital gains of $1. What is the rate of the return to an investor, who bought the fund at the beginning of the year? (Provide your answer in percent rounded to two decimals omitting the % sign)

In a closed economy, what happens in the short run as a result of an increase in taxes?

Which of the following would decrease real wages in the medium run?

Based on price setting behaviour, we know that a decrease in the price markup will cause:

Which of the following policies would increase output (Y) and improve the trade balance (NX) simultaneously?

If producers become more competitive, we would expect to observe:

The data in columns 1 and 2 in the table below are for a private closed economy.

a. Use columns 1 and 2 to determine the equilibrium GDP for this hypothetical economy.

b. Now open up this economy to international trade by including the export and import figures of columns 3 and 4. Fill in columns 5 and 6 and determine the equilibrium GDP for the open economy. What is the change in equilibrium GDP caused by the addition of net exports?

c. What is the multiplier in this example?

Calculate the pressure in cm H2O exerted in the closed end of an apparatus if the atmospheric pressure is 720.0 torr and the height of the water coloumn is 22.3cm.

Let A be a subset of all Real Numbers. Prove that A is closed and bounded (I.e. compact) if and only if every sequence of numbers from A has a subsequence that converges to a point in A.

Given it is an if and only if I know we need to do a forward and backwards proof. For the backwards proof I was thinking of approaching it via contrapositive, but I am having a hard time writing the proof in a way that is understandable to the readers.