17. () Suppose policymakers take actions that cause a contraction of aggregate demand. Which of the following is a short-run consequence of this contraction? A B C D The inflation rate decreases. The level of output decreases. The unemployment rate increases. All of the above are correct.
Q: ០៣៩៣៩៥៩អ៊ីវត83ទវគ៖ 90 85 80 75 65 60 55 50 45 40 35 30 25 20 15 10 0 5 10 15 20 25 30 35 40 45 50 55…
A: The consumer reservation price refers the maximum price a consumer is ready to pay for commodity.
Q: A factory engaged in the fabrication of an automobile part with a production capacity of 10,742…
A: Given; Production capacity= 10742 units per year Operating capacity= 62% Annual income= P485124…
Q: On average, the market price of roses on Valentine's Day is $10 per rose. Interestingly, when…
A: Here, the given graph shows the willingness to pay for a specific unit of roses and the utility or…
Q: What amount of money invested today at 15% interest can provide the following scholarships: P 30 000…
A: The measure that depicts current stream of income flows being discounted at a specified rate of…
Q: A small print shop is investing in new printing equipment that will cost $42,000. They estimate that…
A: Given information Initial investment=42000 Annual revenue=14000 Salvage value=3000 Tax rate=27%…
Q: the central bank requies private banks to hold $8.00 of reserves for every $100 in deposits then the…
A: Required reserves ratio is the reserves banks must hold.
Q: The graph shows the start of a timeline that tracks the price level over time. At time A, new money…
A: Expansionary monetary policy or the increase in money supply in the economy by central banks is used…
Q: 2. You were asked by your boss to compare the concentration of two different markets, market A and…
A: Given, c6A=0.50c7B=0.40
Q: Suppose the price elasticity of demand for a good called "widgets" is 0.4. Is this good more elastic…
A: The price elasticity of demand measures the quantitative relationship between the price and quantity…
Q: . What is the total gain in apparel and chemical output that would result from such specialization?…
A: Opportunity costs address the potential advantages that an individual, investor, or business passes…
Q: A startup is considering buying a $295,000 piece of equipment. If it purchases the equipment, it…
A: Given information Initial investment= $295000---- by taking a loan Interest rate for repayment of…
Q: in a perfectly competitive industry, in the long run, firms earn a positive economic profit firms…
A: In financial matters, explicitly broad balance hypothesis, an ideal market, otherwise called an…
Q: Which of the following is NOT characteristic of a capitalist economy? Group of answer choices…
A: The activities that are related to production, sale, consumption and exchange of resources between…
Q: List six primary public policy arguments for promoting renewable energy sources. From the list,…
A:
Q: Given the information: Interest rate in US (Rh): Interest rate in UK (Rf): The current spot rate for…
A: Spot rate is the price of any currency or a product will be exchanged or traded on the spot or…
Q: Rikell company produces helmets using labor (L) and capital (K). Its production function is given by…
A: Complementary goods are consumed together in fixed proportion
Q: A good's demand is given by: P = 278-3Q. At P= 49, the point price elasticity is: Enter as a value…
A: Given: The demand function is: P = 278 - 3Q The price P is = 49 To Find: The point price elasticity:
Q: Consider an economy with zero capital mobility. Will exchange rate overshooting still occur? What…
A: In financial matters, overshooting, otherwise called the swapping scale overshooting speculation, is…
Q: Labor in developing countries generally, 01 favors foreign direct investment inflows because the…
A: Foreign direct investment is when foreign companies set up business in the domestic country.
Q: P₁ P₂ P₁ Y₂ Y₂ Y₂ AD₁ AD₂ Quantity of Output Starting from P2 & Y2, the intersection of SRAS1 & AD2,…
A: Given information; The economy is currently at the intersection point of SRAS1 and AD2. And the…
Q: Your firm, Content Colleague, is similar to Happy Worker, a Canadian company that designs and…
A: The measure that depicts various quantities of goods and services being demanded by individuals at…
Q: In dynamic pricing environment where prices change regularly the decision to open or close different…
A: Dynamic pricing:- Other names for dynamic pricing include price increase and time-based costing. By…
Q: A city is spending $19.3 million on a new sewage system. The expected life of the system is 40…
A: Capitalized value, which is based on a projection of the asset's expected income over the course of…
Q: Which of the following is NOT a function of the Federal Reserve? Multiple Choice O Lender of Last…
A: When talking about the Federal Reserve, it is the Central banking authority in the United States.
Q: Elaborate the "concept of homogeneity and Returns to Scale. Mathematically prove the following…
A: Here, we have the production function:- XL,K=δ0LαKβ To prove the homogeneity of this production…
Q: Suppose demand and supply are given by: (LO3, LO4) Qx d = 14 − 1/2 Px and Qx s = 1/4Px − 1 a.…
A: According to the law of demand, consumers will purchase less of an economic good at higher prices.…
Q: Fill in the blank with the corresponding options. Be sure to type them exactly as they are written…
A: In a free market, equilibrim price and quantity is determined by the forces of the demand and supply…
Q: H10. the plot of national income and price represents aggregated supply true false
A: The idea of supply is used in economics to estimate the volume of a good or service produced by…
Q: The firm tries to maximize the production of P = 12MC. The company reserves a budget of Rp 500 to…
A: Production function shows the functional relationship between the output and input. The condition…
Q: 2) Leyla has the utility function U(x₁,x₂) = 4x₁²x₂³. (x₁: nuts, x₂: berries). a) If Leyla has an…
A: In this question:- The utility function Ux1,x2=4x12x23 where x1 is nuts and x2 is berries Clearly in…
Q: As the MPC rises, the multiplier falls does not change increases falls by .05…
A: MPC is the marginal propensity to consume which is the percentage change in income spent on…
Q: Macaroni and cheese are complements, when the price of macaroni goes up, the demand curve for…
A: Two goods are complements when they are consumed together.
Q: 2. Bangladesh Production The following production possibilities table data represent the amount of…
A: Given production possibilities schedules Points/options T-shirts Shorts A 80,000 0 B 60,000…
Q: Question II What it will be the value of X that will make the present value equals to 0 at i=8%? 100…
A: Cash flow diagram diagram represents the movement of cash inflow and cash outflow within a firm.…
Q: Starbucks' pumpkin spice latte is back to mess with your brain Yes folks, it's time! The sugary,…
A: Elasticity measures the responsiveness of quantity to changes in price
Q: On your graph from part (a), label the world market price of wheat as PWPW, and identify the…
A: On a graph, a demand curve depicts the relationship between the quantity demanded and the price in a…
Q: Choose the correct statement: Select one: a.There is a negative relationship between the price level…
A: The measure that depicts quantities of goods and services demanded at various levels of price is…
Q: Customer retention
A: Customer retention is the ability of a business or product to keep its customers for a predetermined…
Q: Answer questions 5-7 based on the following information: Suppose that the production function for…
A: Given:F(L,K)=L14K12w=2r=4 FC= $100
Q: Self-Service Technologies (SSTs) have led to a reduction of and in some instances a complete…
A: The study concentrates on reliable and applicable ways to manage SST which means self service…
Q: A few years ago in Northern California wildfires destroyed many vineyards. The market for wine was…
A: Demand is the market's willingness to buy the item or service, while supply is the market's capacity…
Q: A state funded report in Florida brings media attention to the wage gap between landscapers and…
A: In the terms of economics, work/employment implies the condition of having some work or being…
Q: Suppose the demand function of a product is given by q = 14-5 p.1 1, the demand is elastic, and the…
A: The price elasticity of demand, also known as demand elasticity, is defined as the percentage change…
Q: MIC Mandovia Ducennia table: Number of Hours to Make One Rotid 50 150 Number of Hours to Make One…
A: Given information: There are two goods, i.e., Rotid and Tauron There are two nations, i.e., Mandovia…
Q: Two firms are competing to establish one of two new wireless communication standards, A or B. A…
A: Pure Strategy Nash Equilibrium is achieved at the point where both firms choose the strategy ,…
Q: Three firms are competing through prices (Bertrand competition). They are all selling the same…
A: Bertrand competition is a model of an oligopoly market structure.
Q: Can a firm earn an economic loss and an accounting profit at the same time?
A: The measure that depicts distribution of income to owner in a profitable process of production in…
Q: 5. Consider the Taylor rule: r = (81)[-1]+($2)[r" + ayY+az(-7)]. Assume target inflation at 2% and…
A: The Taylor Rule states that the Federal Reserve should raise interest rates when either inflation or…
Q: Assume an economy is represented by the following: C = 240 + 0.6Yd I = 400 G = 2000 T = 2000 a.…
A: Equilibrium in the economy occurs where production equals aggregate expenditure
Q: Economics In one company it was calculated that producing 20 units 7 years ago would cost the…
A: Introduction Cost capacity equations also known as sizing model. Capacity cost is an expenditure or…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- 8. The economy begins in long-run equilibrium. Then one day, the president appoints a new chairman of the Federal Reserve. This new chairman is well-known for his view that inflation is not a major problem for an economy. a. How would this news affect the price level that people would expect to prevail? b. How would this change in the expected price level affect the nominal wage that workers and firms agree to in their new labor contracts? c. How would this change in the nominal wage affect the profitability of producing goods and services at any given price level? d. How does this change in profitability affect the short-run aggregate-supply curve? e. If aggregate demand is held constant, how does this shift in the aggregate-supply curve affect the price level and the quantity of out-put produced? f. Do you think this Fed chairman was a good appointment?2. Assume the short-run aggregate supply curve can be expressed algebraically as: Y = 4,500 + 3,000π and the dynamic aggregate demand curve can be written as: Y = 5,000 – 1,000π a. Find the numerical value for the short-run inflation rate? Show your work. b. Find the numerical value for equilibrium output in the short run? Show your work.15.______________Demand-pull inflation: FILL IN THE BLANK A) occurs when total spending in the economy is excessive. B) is measured differently than cost-push inflation. C) can be present even during an economic depression. D) is also called "hyperinflation. E) is also called deflation"
- 9. How will (a) an unexpected 3 percent fall in the price level in the goods and services market differ from (b) 1 percent inflation when 4 percent inflation had been expected? What impact would (a) and (b) have on the real price of resources, profit margins, output, and employment? Explain.4. The long-run Phillips curve This graph shows the long-run Phillips curve (LRPC) and several of the short-run Phillips curves (PC) for an economy. INFLATION RATE (Percent) 12 PC PC PC LRPC 15 1 21 3 B + D E +° + +2 G + 5 6 UNEMPLOYMENT RATE (Percent) ? Assume that the economy is initially at point E, with an expected and actual rate of inflation of 6% and an unemployment rate of 5%. Which of the following events could lead the economy to move to point H in the short run? The government increases spending. O Consumption spending rises. Net exports increase. The Fed raises interest rates. Which of the following statements would best explain a move from point H to point G? Nominal wages are renegotiated at the lower inflation rate of 3%, leading to an increase in employment. The government pursues a contractionary monetary policy.2. Explaining short-run economic fluctuations A majority of economists believe that in the long run, real economic variables and nominal economic variables behave independently of one another. For example, an increase in the money supply, a no long-run effect on the quantity of goods and services the economy can produce, a and nominal variables is known as VERTICAL AXIS However, in the short run, most economists believe that real and nominal variables are intertwined. Economists use the model of aggregate demand and aggregate supply to examine the economy's short-run fluctuations around the long-run output level. The following graph shows an incomplete short-run aggregate demand (AD) and aggregate supply (AS) diagram-it needs appropriate labels for the axes and curves. In the questions that follow you will identify some of the missing labels. The aggregate HORIZONTAL AXIS variable, will cause the price level, a AS AD (?) variable, to increase but will have variable. The distinction…
- 6. Using a graph, explain what would be the effect of an appreciation of the US Dollar in the aggregate demand (AD). What would be the effect on the GDP and the inflation level?5. The U.S. conducts a great deal of trade with western European countries. Suppose western European countries suffer a severe recession. How would the European recession affect the general price level, real GDP and employment in the U.S. in the short run? In the long run? Explain in words and a graph.2. Explaining short-run economic fluctuations A majority of economists believe that in the long run, real economic variables and nominal economic variables behave independently of one another. For example, an increase in the money supply, a (real/nominal) variable, will cause the price level, a (real/nominal) variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a (real/nominal) variable. The notion that an increase in the quantity of money will impact the price level but not the output level is known as (price neutrality/monetary neutrality/the quantitiy theory). However, in the short run, most economists believe that real and nominal variables are intertwined. Economists use the model of aggregate demand and aggregate supply to examine the economy's short-run fluctuations around the long-run output level. The following graph shows an incomplete short-run aggregate demand (AD) and aggregate supply (AS)…
- 1. Show that if the economy's aggregate supply curve is vertical, fluctuations in the growth of aggregate demand produce only fluctuations in inflation with no effect on output.10. Which of the following statements is true? a Cost-push inflation occurs as prices rise because of a rise in per-unit cost of production (unit cost = total cost/units of output). With cost-push inflation, prices rise but output falls. b Rising costs reduce profits and the amount of output firms are willing to supply at the current price level. As a result, the economy’s production of goods and services declines and the price level rises. c Supply shocks have been the major source of cost-push inflation. Supply shocks occur when there are dramatic increases in the price of raw materials or energy. d All of the above. e Only a) and b)12. Inflation The economy begins in long-run equilibrium. Then one day, the president appoints a new chair of the Federal Reserve. This new chair is well known for her view that inflation is not a major problem for an economy. Note: You will not be graded on any changes you make to the following graph, but you may use it to help you understand the scenario described. LRAS Aggregate Supply Aggregate Demand Aggregate Supply LRAS Aggregate Demand Quantity of Output Which of the following statements accurately describes what would happen as a result of this news? Check all that apply. O People would expect the price level to rise. O The nominal wage that workers and firms agree to in their new labor contracts would be higher than it would be otherwise. O The profitability of producing goods and services at any given price level would increase. O The short-run aggregate-supply curve would shift to the left. If aggregate demand is held constant, the shift in the aggregate-supply curve will…