Ch13
... rate. In the short run nominal and real interest rates remain the same because inflationary expectations haven’t changed. The real interest rate determines the C, I, NX and consequently the PAE. The Keynesian Cross gives us the equilibrium Y. We now have a ...
... rate. In the short run nominal and real interest rates remain the same because inflationary expectations haven’t changed. The real interest rate determines the C, I, NX and consequently the PAE. The Keynesian Cross gives us the equilibrium Y. We now have a ...
Exam Name___________________________________
... 22) Given an MPC of 0.80, if there are no income taxes or imports and prices are constant, then when investment increases by $50 million, when prices are fixed equilibrium GDP would A) increase by $50 million. B) increase by $400 million. C) increase by $250 million. D) To answer the question more i ...
... 22) Given an MPC of 0.80, if there are no income taxes or imports and prices are constant, then when investment increases by $50 million, when prices are fixed equilibrium GDP would A) increase by $50 million. B) increase by $400 million. C) increase by $250 million. D) To answer the question more i ...
Short-Run Macroeconomic Equilibrium
... aggregate supply curve and the aggregate demand curve is the point of short-run macroeconomic equilibrium. It determines the short-run equilibrium aggregate price level and the level of short-run equilibrium aggregate output. 2. Economic fluctuations occur because of a shift of the aggregate demand ...
... aggregate supply curve and the aggregate demand curve is the point of short-run macroeconomic equilibrium. It determines the short-run equilibrium aggregate price level and the level of short-run equilibrium aggregate output. 2. Economic fluctuations occur because of a shift of the aggregate demand ...
Exam 3 - UTA.edu
... 1) Assuming the economy is starting at the natural rate of output and everything else held constant, the effect of ________ in aggregate ________ is a rise in both inflation and output in the short -run, but in the long-run the only effect is a rise in inflation. A) a decrease; supply B) an increase ...
... 1) Assuming the economy is starting at the natural rate of output and everything else held constant, the effect of ________ in aggregate ________ is a rise in both inflation and output in the short -run, but in the long-run the only effect is a rise in inflation. A) a decrease; supply B) an increase ...
Economics 154a, Spring 2005 Intermediate
... equilibrium is at point C, where there is full employment. 3. This problem studies the dynamic behavior of a macroeconomic model that consists of three equations: Okuns law, an aggregate demand curve, and a Phillips curve... (a) Suppose that the growth rate of the money supply is 12% per year... ANS ...
... equilibrium is at point C, where there is full employment. 3. This problem studies the dynamic behavior of a macroeconomic model that consists of three equations: Okuns law, an aggregate demand curve, and a Phillips curve... (a) Suppose that the growth rate of the money supply is 12% per year... ANS ...
Aggregate Supply and the Phillips Curve
... Figure 1 shows what the Phillips curve relationship looks like for the United States. As we can see from panel (a), the relationship works well until 1969 and seems to indicate an apparent trade-off between unemployment and wage inflation: If the public wants to have a lower unemployment rate, it ca ...
... Figure 1 shows what the Phillips curve relationship looks like for the United States. As we can see from panel (a), the relationship works well until 1969 and seems to indicate an apparent trade-off between unemployment and wage inflation: If the public wants to have a lower unemployment rate, it ca ...
1) Ceteris paribus, as real GDP growth ______, investment
... 2) Accelerator theory refers to the theory of: A) investment that emphasizes that current investment spending depends positively on the expected future growth of GDP. B) investment that emphasizes that current investment spending depends positively on the expected future growth of government spendin ...
... 2) Accelerator theory refers to the theory of: A) investment that emphasizes that current investment spending depends positively on the expected future growth of GDP. B) investment that emphasizes that current investment spending depends positively on the expected future growth of government spendin ...
inflation rate
... Demand-pull inflation results from excessive pressure on the demand side of the economy. “Too much money chases too few goods” enabling producers to raise prices. ...
... Demand-pull inflation results from excessive pressure on the demand side of the economy. “Too much money chases too few goods” enabling producers to raise prices. ...
File
... 3. Before Keynes, most economists thought it was impossible for too little spending in an economy to cause high _________________. 4. Keynes stated that even if people weren’t spending much money, firms might not ____________ prices to sell more goods. a. Firms do not cut prices because they first w ...
... 3. Before Keynes, most economists thought it was impossible for too little spending in an economy to cause high _________________. 4. Keynes stated that even if people weren’t spending much money, firms might not ____________ prices to sell more goods. a. Firms do not cut prices because they first w ...
UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION BA ECONOMICS IV SEMESTER CORE COURSE
... 86. Christina Romer’s criticism of the belief that business cycles had moderated since World War II depended on the fact that: (a) estimates of the timing of business cycles since World War II had been inaccurate. (b) misuse of historical data had caused economists to understate the size of cyclical ...
... 86. Christina Romer’s criticism of the belief that business cycles had moderated since World War II depended on the fact that: (a) estimates of the timing of business cycles since World War II had been inaccurate. (b) misuse of historical data had caused economists to understate the size of cyclical ...
Chapter 20
... ANS: d. Answers a, b, c shift the aggregate demand curve to the right. 6. Which of the following will not shift the aggregate demand curve to the left? a. Consumers become more optimistic about the future. b. Government spending decreases. c. Business optimism decreases. d. Consumers become pessimis ...
... ANS: d. Answers a, b, c shift the aggregate demand curve to the right. 6. Which of the following will not shift the aggregate demand curve to the left? a. Consumers become more optimistic about the future. b. Government spending decreases. c. Business optimism decreases. d. Consumers become pessimis ...
Unanticipated Changes in Aggregate Supply Page 1 of 3
... they experience a short term surge in demand for their products which are relatively under-priced. And finally there’s confusion. Businesses don’t know yet whether these rising prices represent increased demand for their particular products or whether it’s just general economy-wide inflation so they ...
... they experience a short term surge in demand for their products which are relatively under-priced. And finally there’s confusion. Businesses don’t know yet whether these rising prices represent increased demand for their particular products or whether it’s just general economy-wide inflation so they ...
Chapter 20
... ANS: d. Answers a, b, c shift the aggregate demand curve to the right. 6. Which of the following will not shift the aggregate demand curve to the left? a. Consumers become more optimistic about the future. b. Government spending decreases. c. Business optimism decreases. d. Consumers become pessimis ...
... ANS: d. Answers a, b, c shift the aggregate demand curve to the right. 6. Which of the following will not shift the aggregate demand curve to the left? a. Consumers become more optimistic about the future. b. Government spending decreases. c. Business optimism decreases. d. Consumers become pessimis ...
Inflation - SP Moodle
... • *borrowers must repay in $$$ worth more than what they borrowed – (demand side) - increases real burden of debts • debtors cut spending when debt rises • Also…consumers postpone purchases (Why?) • creditors don’t increase spending by same amount – (supply side) - downward nominal wage rigidity • i ...
... • *borrowers must repay in $$$ worth more than what they borrowed – (demand side) - increases real burden of debts • debtors cut spending when debt rises • Also…consumers postpone purchases (Why?) • creditors don’t increase spending by same amount – (supply side) - downward nominal wage rigidity • i ...
Mankiw 6e PowerPoints
... 4. The long-run aggregate supply curve is vertical, because output depends on technology and factor supplies, but not prices. 5. The short-run aggregate supply curve is horizontal, because prices are sticky at predetermined levels. ...
... 4. The long-run aggregate supply curve is vertical, because output depends on technology and factor supplies, but not prices. 5. The short-run aggregate supply curve is horizontal, because prices are sticky at predetermined levels. ...
Aggregate Demand/Aggregate Supply
... Friedman, an economist at the University of Chicago who was awarded the Nobel Prize in Economics in 1976. Monetary growth rule A plan for increasing the quantity of money at a steady, predictable rate that does not respond to changes in economic conditions. • Steady monetary growth can serve as an a ...
... Friedman, an economist at the University of Chicago who was awarded the Nobel Prize in Economics in 1976. Monetary growth rule A plan for increasing the quantity of money at a steady, predictable rate that does not respond to changes in economic conditions. • Steady monetary growth can serve as an a ...
Countries can only grow fast if their exports grow fast
... for labour); input prices or raw material prices increase (land payment, this will also include oil price shocks and real exchange rate changes); interest rate changes (payment for capital); or the profit margins get larger (entrepreneurship payment, includes the increase in the monopoly power). Dem ...
... for labour); input prices or raw material prices increase (land payment, this will also include oil price shocks and real exchange rate changes); interest rate changes (payment for capital); or the profit margins get larger (entrepreneurship payment, includes the increase in the monopoly power). Dem ...
Economic Policies for the 1980`s - Scholarly Commons
... supplies for a long time. Considering the worldwide demand and supply relationships, the price of crude petroleum is likely to double again within a few years.6 Apart from the severe damage inflicted upon the oil-importing Less Developed Countries (LDC's) by the huge increases in their oil import bi ...
... supplies for a long time. Considering the worldwide demand and supply relationships, the price of crude petroleum is likely to double again within a few years.6 Apart from the severe damage inflicted upon the oil-importing Less Developed Countries (LDC's) by the huge increases in their oil import bi ...
C:\Documents and Settings\Ivan
... (b) When there are IS shocks, the rule does not work very well. Suppose a shock shifts the IS curve from IS 1 to IS 2 , as shown in the figure below. Targeting the real interest rate requires the Fed to increase the money supply to shift the LM curve from LM 1 to LM 2 . While this maintains the real ...
... (b) When there are IS shocks, the rule does not work very well. Suppose a shock shifts the IS curve from IS 1 to IS 2 , as shown in the figure below. Targeting the real interest rate requires the Fed to increase the money supply to shift the LM curve from LM 1 to LM 2 . While this maintains the real ...
DOC
... Output change that results from a change in aggregate demand is a permanent effect. A change in aggregate demand leads to a permanent change of higher output. An increase in aggregate demand increases real GDP only temporarily. An increase in aggregate demand increases real GDP by a multiple of the ...
... Output change that results from a change in aggregate demand is a permanent effect. A change in aggregate demand leads to a permanent change of higher output. An increase in aggregate demand increases real GDP only temporarily. An increase in aggregate demand increases real GDP by a multiple of the ...