1. Find the value of autonomous spending. 2. What is the slope of the LM curve? 3. Find the value of the real money supply. C = 1500+ 0.40*(Y-T) I = 600-60*i G = 200 T = 2000 M = 2100 P = 5 L = 0.75Y-25*i
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- Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.Econ question: a.Explain and show the impact on the money market when the Federal Reserve lowers the interest rate on bank reserves (the IORB). Graph and Detail the adjustment process. (the seps to equilibrium) b. How is the level of investment in the economy affected? Graph and explain. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.1. 1. Factors that shift the IS curve involve: A) interest rates and levels of GDP. B) the quantity of money and the demand for money. C) the trade balance. D) exogenous variables affecting demand, such as a change in government spending or a change in the exchange rate. 2. The LM curve shows that, with a fixed supply of money, as GDP rises, the demand for money will ____ and the rate of interest will ____. A) rise; rise B) fall; fall C) rise; fall D) fall; rise 3. If the supply of money increases, what happens in the IS–LM framework? A) The IS curve shifts right. B) The LM curve shifts right. C) The IS curve shifts left. D) The LM curve shifts left. 4. If the demand for money increases, what happens in the IS–LM framework? A) The IS curve shifts right. B) The LM curve shifts right. C) The…
- consumption=100+0.8Yd investment= 150-16i government expenditure= 100 taxes=0.25Y DD for money=0.2Y-2i money supply=300 price level=2 determine equilibrium level of income and rate of interestThe graph shows a demand for money curve. Draw a new demand for money curve that shows the effect of an increase in real GDP. Label it MD₁. Draw a demand for money curve that shows the effect of an increase in the number of families that have a credit card. Draw this demand for money curve in relation to the original demand for money curve, MD. Label the new curve MD2. 12- 10- 8- Nominal interest rate (percent per year) 6- 4- 2- 0 2 4 6 8 MD 10 12 ☑ Quantity of money (trillions of dollars) >>> Draw only the objects specified in the question.Q: Suppose that when everyone wakes up tomorrow, they discover that the government has given them an additional amount of money equal to the amount they already had. Explain what effect this doubling of the money supply will likely have on the following:a. The total amount spent on goods and servicesb. The quantity of goods and services purchased if prices are stickyc. The prices of goods and services if prices can adjust
- Q.1.5 Which one of the following statements is NOT true? (a) Money is the most liquid asset.(b) Money is a store of value.(c) Money is a unit of account.(d) Money is another term for income.Q.1.6 Which of the following will cause the demand curve for money to shift to theright?(a) An increase in real Gross Domestic Product (GDP).(b) A decrease in the repo rate.(c) An increase in the quantity of money available.(d) A decrease in the quantity of money available.Q.1.7 A budget deficit occurs when: (a) there is an increase in taxation.(b) government spends less than is generated by taxation.(c) government spending is very high.(d) Government spends more than is generated by taxation.Task 3 Consider a closed economy where the goods and money markets are described by the following relationships: C = 200 + 0.9(Y – T) I= 400 – 15r M/P = 200 + Y – 100r G = 150 T = 100 M = 2000 P| =2 Where Cis planned consumption, I is planned investment spending, T is government tax revenues, G is government purchases, M is the money supply, P is the price level and r is the interest rate. c) The government reduces taxation to T=50 in order to boost economic activity. Assume no changes in The values of all the other variables. 1. What is the immediate increase in income before the economy adjusts to its new equilibrium? 2. What are the economy's equilibrium level of output Y and interest rate following the cut in taxation? Compute the equilibrium level of consumption and investment spending. With the help of the IS/LM graph, carefully explain what happens to the economy following the cut in taxation. d)lf the government intends to pursue monetary policy instead of fiscal policy in…Figure: Short-Run Determination of the Interest Rate Interest rate, r G 12 (a) MS₁ MS₂ MD Quantity of money, M Interest rate, r O increase above r₁. O fluctuate randomly. remain at r₁. O decrease to r2- (b) S₁ D S₂ Quantity of loanable funds Refer to Figure: Short-Run Determination of the Interest Rate. If the money supply is at MS, and the central bank buys Treasury bills, then in the short run the interest rate will:
- 14) The level of aggregate output demanded will increase if A) the money supply is increased. C) All, A, B, and D, are very likely. B) the interest rate is reduced. D) net taxes are reduced.Draw a demand for money curve. Label it MDo- Draw a demand for money curve that shows the effect of a decrease in real GDP. Label it MD,. Interest rate (percent per year) 8- Draw a demand for money curve that shows the effect of new financial technology that decreases the demand for money and that follows the decrease in real GDP. Label it MD,. What is the effect in the money market of a decrease in real GDP? 6- When real GDP decreases, A. there is a decrease in the quantity of money demanded. The opportunity cost of money increases B. there is an increase in the quantity of money demanded. The opportunity cost of money decreases O C. the quantity of money decreases O D. a decrease in the demand for money occurs 2- 2.6 2.8 3.0 3.2 3.4 Real money (trillions of 2005 dollars) >>> Draw only the objects specified in the question. Click the graph, choose a tool in the palette and follow the instructions to create your graph. DII F10 20 888 F9 F7 F8 F6 F5 F4 F3 esc F2 F1 $ % ! 8. 4 1 Y R Q W…An increase in perceived wealth due to an increase in stock prices will cause: Select one: a. right-shift of the aggregate demand curve. b. movement along the aggregate demand curve. c. left-shift of the aggregate supply curve. d. right-shift of the aggregate supply curve.