Question 3: Monetary Policy
Suppose the economy is in an inflationary gap, and the Fed responds by conducting a
contractionary monetary policy.
b. Explain what the Fed does if it conducts open market operations to control inflation.
c. Explain the effects of this monetary policy on interest rates, business investments,
consumption spending, the value of the U.S. dollar, and the value of net exports.

In the dynamic aggregate demand and aggregate supply​ model, the rate of inflation will increase​ if:

Select one:

A. AD shifts to the right by more than the LRAS curve.

B. If total production increases faster than total spending.

C. SRAS and LRAS curves shifts to the right by the same magnitude.

D. AD shifts to the right by less than the LRAS curve.

This week we are focused on health economics in the hospital sector. Hospitals represent the largest segment of healthcare spending. In this discussion we will explore how the dominant healthcare supplier (hospitals) responds to changes in payment by the dominant healthcare payer (Medicare).

What was the hospital sector's response after the enactment of Medicare (in its original form) in 1965? Describe fully. Cite sources.

Credit Pulls Databases

• Should consumers trust / rely on information from a so-called credit pulls database?

• What are the biggest problems with making financial decisions based on anecdotal, crowdsourced info?

• Is it possible for an individual to independently and accurately predict his or her odds of getting approved for a given credit card and receiving a certain spending limit? Is it worth trying?

1. What is the multiplier if households have an MPC of 0.6?
2. Create a table similar to Figure 10.8 in your textbook. Assume that the households have an MPC of 0.80 and there is a $9 billion increase to investment spending.

Compare the impact of an increase in the government's budget deficit on national saving, interest rate and investment spending in two cases: a small open economy and a closed economy. The two economies are otherwise comparable. Assume prices are flexible and that factors of production are fully employed in both economies. Assume there is perfect capital mobility for the small open economy. (125 words maximum)

The government has many tools at its disposal to help create stability for an economy. Explain the best type of fiscal policy for our economy right now. Fiscal policy involves changes in government spending and/or taxes. Explain what has a more direct impact on stimulating an economy out of those two tools that can be used by fiscal policy.

1a: Because it involves the use of money, the entire value of the sale of a used car is counted as part of gross domestic product.

1b: When Net Exports are negative, it means that exports exceeded imports.

1c: By definition of GDP, total wage earnings and interest income must always equal consumption and investment spending, government purchases, and net exports.

1.) Show on a graph (using the aggregate demand and aggregate supply model) the effects of:

a.) A decrease in aggregate demand/recession (show what happens both in the short-run and in the long-run and make sure to explain your results)

b.) Expansionary fiscal policy (meaning reduction in taxes or increase in government spending) trying to stimulate the economy to get it out of the recession.

Use the demand-supply framework in Figure 23-2 to explain how increased cost sharing could lead to lower utilization and spending on health care.

See photo of graph at this link:

http://www.chegg.com/homework-help/would-individual-mandates-health-insurance-burdensome-poor-e-chapter-23-problem-3E-solution-9780132954808-exc