Explain how the original Phillips curve was transformed into the expectations augmented Phillips curve. Using the latter, describe why any expansionary policy would not be effective in the long run and move the macro-economy back to the Natural Rate of Unemployment (NRU).
Q: A series of cash flows are established on an account as listed below. - Payment of P1.325 at the end…
A: We have a set of cash flows: Cash flow of P1.325 at the end of the 2nd, 4th, and 7th year at an…
Q: The Zen Hotel has a local monopoly because of a historic license to operate inside Blue Rock State…
A:
Q: The horizontal axis is labeled firm A. It ranges from high price to low price from left to right.…
A:
Q: GDP per capita is one way to measure an economy's growth. China and India began to progress when…
A: Both china and India allowed private partnership at the same time
Q: Price-Demand: p = D(x) 984 410 2140 220 2940 143 4200 55 5125 45 Price-Supply p = S(x) 984 21 2140…
A: As given information Price demand table Price supply table
Q: Usuing the Monetary Intertemporal Model explain the equilibrium effects of a decrease in CURRENT…
A: A reduction in the current capital stock has a significant impact on labor demand. It also affects…
Q: Consider a standard position auction. There are three positions: Top (T), Middle (M) and Bottom (B).…
A: Second Price Auction Second Price Auction is the auction in which the highest bidder wins the…
Q: What are the annual payments necessary to pay a P1,000,000, 12-year loan if the loan rate is 8 %? *…
A: The term "annual payment" refers to all payments made on a yearly basis. Because of the nature of…
Q: (a) The public transportation company in a city charges senior citizens & students $100 for a…
A: A Subsidy is defined as payment individuals or firms, usually in the form of cash payment, from the…
Q: 3. A machine with an initial price of $30,000 has an annual operating cost of $15,000 and a life of…
A: Using PW factor, PW of Machine 1 = 30000 - 15000(A/P, i, n) =…
Q: To pay off $75000000 worth of new construction bonds when they come due in 25 years, a water…
A: Working quarterly: Number of quaters (n) =25*4=100Rate of Interest (r) =6.44=1.6%Future Value (FV) =…
Q: Why is deflation bad for the economy? Does not deflation make us better off because things are…
A: The situation that depicts a general fall in the price level of goods and services is known as…
Q: at the graph of a perfectly competitive firm and its average total cost curve is entirely above the…
A: In a perfectly competitive market there are large number of firms producing similar and identical…
Q: If Tim borrows $600 from a payday loan operator and has to pay S775 at the end of 1 month, how much…
A: First, we need to find out the monthly interest rate and need to apply the same for a year on the…
Q: If you are traveling in China and you purchase a meal that costs 140 yuan and the current exchange…
A: Given: You are traveling in China, where the cost of meal = 140 yuan. Current Exchange rate = 7…
Q: Freeman Engineering paid $40,000 for specialized equipment for use with their new global positioning…
A: A depreciation scheme used for tax reasons in the United States is the modified accelerated cost…
Q: Question 1 Given the following data for a country A for the year ended December 2021 Items Private…
A:
Q: Suppose the cost function for a firm is given by C(Q) = 100 + Q2. If the firm sells output in a…
A: A perfectly competitive firm is a price taker, which means it takes the price determined by market…
Q: What is the impact or effect of values, attitudes and beliefs on technological advancement?
A: Technology is defined as the accumulated knowledge and application of techniques, skills, methods,…
Q: An electronics plant’s production function is Q = 5LK, where Q is its output rate, L is the amount…
A:
Q: Funds from the deficient sectors are usually used to finance the sectors facing surplus of funds. *…
A: In a market, people make an exchange of funds based on their requirements and their interest, which…
Q: 7. Consider a two-period model in which a family works in the first period and earns $120,000 and…
A: Intertemporal Budget Constrain is given by the equation : c1 + c2/(1+r) = Y1 + Y2/(1+r) We know ,…
Q: 13. (Section 4.4) The weekly revenue, R(r), in thousands of dollars, t weeks after January 1st, for…
A: Revenue refers to the money that is generated from a specific business operation, that is calculated…
Q: A change of which of the following will not directly shift the demand curve for Regular Coke?…
A: A shift in demand curve occurs when the quantity demanded of the good increases or decreases at the…
Q: 9. Use an AD/AS model to show what happens if there is a) a decrease in consumption spending b) a…
A: Diaclaimer :- As you posted multipart questions we are supposed to solve the first 3 questions only…
Q: Article 2 of the Uniform Commercial Code (UCC) applies to goods. Which of the following is not a…
A: The correct answer is given in the second step.
Q: The efficient market hypothesis assumes that all investors act on the same set of information. *…
A: This statement is true. The efficient market hypothesis assumes that all investors act on the same…
Q: pose an economy's natural rate of unemployment is 5 percent. If the unemp percent, according to…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you. If you…
Q: Which of the following statements are FALSE?Select all appropriate choices. When the inflation rate…
A: In an economy, inflation rate is considered as a macroeconomic variable as it influence the economy…
Q: Following data for a country A for the year ended December 2021 Items RM Million Private expenditure…
A: *Answer: Gross domestic product (GDP) is the standard measure of the value added created through…
Q: Suppose the demand curve is given by P=10-Q and the supply curve by Q=P If the price in the market…
A: Given: Demand Curve : P=10-Q Supply Curve : Q=P Given market price =$7
Q: In the circular flow model an example of a government spending flow would be collecting taxes O…
A:
Q: Which of the following statements is (are) correct? (x) One key difference between an oligopoly…
A: Oligopoly market:- Market is owned by a few of producers are known as oligopoly markets. It could…
Q: Consider a single country and a single good. The demand curve for this good is given by QD = 144 -…
A: A monopolist is a firm that sells a heterogeneous product in the market. He sells the less quantity…
Q: You are given the following information about an economy, use the information to calculate exercises…
A: Answer: $270 Million
Q: Assume that JMD $1.00 is equivalent to GYD $2.00, suppose that the GYD depreciated by 10%, what is…
A: The measure that depicts the value of one currency being measured in terms of another currency for…
Q: DISCUSS Smith's pin factory example. describe the dramatic effects and the method by which these are…
A: A worker who specializes performs only one task or a limited set of tasks. It refers to separate…
Q: 25. What will happen to the price and quantity of footballs as a result of an increase in the price…
A:
Q: d.How will the firms adjust if the full employment level of income is 1500? Is this an inflationary…
A: A recessionary output gap is when the actual output is less than the potential output and an…
Q: What is the major component of the money supply M1? Certificates of deposit Savings deposits…
A: Money supply M1 consists of currency in circulation, demand deposits (both current and saving…
Q: Figure 34 Quantity (units) 34. In Figure 34, The demand curve in the figure above illustrates the…
A: The elasticity of demand is a measure of sensitiveness of quantity demanded because of a change in…
Q: Assuming that each of the following functions are linear, give an economic interpretation of the…
A: The correct answer is given in the second step.
Q: The concept of flow of funds in an economy can also be used to understand the flow of funds in the…
A: When talking about flow of funds in N economy, it js the situation when the flow of goods and…
Q: Market efficiency primarily concerned with how well the financial market reflects all the available…
A: A financial market is a marketplace where people can trade financial assets for a low transaction…
Q: 1) A company wants to purchase a machine that has the following probable cash flows. It is expected…
A:
Q: A lending company advertises that for a fee of P10, you can immediately borrow up to P200 for one…
A: A lender charges a borrower an interest rate that is a percentage of the principal (the amount…
Q: 1. A investment of x pesos with interest rate of 7% compounded annually will be retired at the end…
A: The amount of money that, if invested now, will grow in value over time at a particular rate of…
Q: What is the main purpose of the Federal Reserve Bank's regulatory oversight of banks? to maximize…
A: The central bank of the United States which was being created by Congress which is also known as the…
Q: Kim has $35057 to invest for 10 years. She has the following options: [A]term deposit at 5%…
A: One of the most important aspects of diversification is the inclusion of a wide range of…
Q: Assume potential GDP is 3,500 and actual GDP is 3,050. If the consumption function is C=400+0.2Yd ,…
A: The aggregated, economy consumption function is mathematically represented as: C = a + b (Y - T) .…
. Explain how the original Phillips curve was transformed into the expectations
augmented Phillips curve. Using the latter, describe why any expansionary policy
would not be effective in the long run and move the macro-economy back to the
Natural Rate of
Step by step
Solved in 2 steps with 1 images
- 2. What is the eqution and shape of the modem aggregate supply curve according to imperfect infomation model? Using the equation of Aggregate Supply (AS) derive the equation of Expectation augmented Phillips curve and explain causes of inflation in tems of it. How does expectation augmented Phillips curve explain Stagflation?What kind of changesin the economy might infuence the slope of the Phillips curve?According to adaptive expectations, what happensto the inflation rate and the unemploymentrate in the following situations?a. Initially, the economy is operating at thenatural rate of 6 percent unemployment.The anticipated rate of inflation is6 percent, and the actual rate is also6 percent.b. In the next period, there is an unexpected risein the inflation rate to 10 percent.c. In the next period, there is an unexpected risein the inflation rate to 12 percent.
- Refer to the accompanying figure. LRAS Inflation a A 0, y' Output O O An economy is currently in long-run equilibrium at point B, at an inflation rate of m, which is too high to sustain economic growth. If an anti-inflationary policy is enacted, the economy will be in short-run equilibrium at point creating gap. O SRAS O SRAS AD' AD A; an expansionary A; a recessionary D; a recessionary D; an expansionary1) According to the Phillips Curve, as unemployment falls what happens to inflation? Why? 2) According to the Phillips Curve, as unemployment rises what happents to inflaiton? Why? 3) According to the Aggregate Supply/ Aggrgeate Demand model, if AD increases what happebs to Price Level GDP and Unemployment 4) Accroding to the AS/AD model, if AD decreases what happens to PL, GDP and unemployment? 5) According to the AS/AD model if AS decreases what happens to PL GDP and unemployment? 6) Based on your answer to #5 how would you show the decrease in AS on the Philips Curve?Check According to the modern view of the Phillips curve, expansionary macroeconomic policy that leads to inflation will reduce unemployment .. only if people underestimate the inflationary side effects of the policy Ob only if people overestimate the inflationary side effects of the policy. Ocif people accurately anticipate the inflationary side effects of the policy Od only if monetary pohcy provides the macroeconomic stamulus.
- “Households decide to save a larger share of their income will shift aggregatedemand curve upward because higher saving will boost investment which inturn increase the demand for investment goods.” Do you agree with thestatement? Explain your choice. e. Graphically derive short run Phillips curve with the help of aggregate demand and supply model.er In 2017, nearly 3.5% of Vietnamese imports constituted of refined oil. If the price of oil rises significantly, what effect would this have on the Phillips curve in Vietnam? Real interest rate Unexpected inflation Decreased Interra Output gep cand Output gap Output gep Unexpected inflation ang costs Output gapAssume that the unemployment rate rises. What is the impact on the short run Phillips curve? O It will shift up. O There will be movement along the curve to the left. O There will be movement along the curve to the right. OIt will shift down. Show Transcribed Text The following equations describes an economy: Y=C+I+G+ NX C = 250 +0.7*(1-t)Y t = 0.2 1 = 300 G = 60 NX = 40 Which of the following statements is true? O If exports increase by 10, equilibrium Y will increase by 33. O Without any changes, the equilibrium level of Y is 2167. O If government spending increases by 40, equilibrium Y will increase by 46.51. The value of the government spending multiplier is 2.27. Show Transcribed Text
- 1. Suppose that the oil price sharply increased for a while, which increased production costs, causing an adverse supply shock. A. Use the AD-AS model to show the effects on output and the price level in both the short- run and long-run. B. Show the adjustment process of the economy from the short-run to the long-run. C. What is the effect on unemployment in short-run and long-run? D. Can policymakers do something to accommodate this shock? Would the outcome be different in this case?a. Are the effects of an increase in aggregate demand in the AD-AS model consistent with the Phillips curve? Explain. b. Discuss the factors determining the slope of the short-run Phillips curve. Is the linear shape appropriate? Why or why not? Pa... v ... III lili3. a) Using AD-AS model, explain how a negative demand shock due to COVID 19 will affect the economy in the short run and long run (Show short run and long run adjustment in a single diagram). b) Derive the equation of Expectation Augmented Phillips curve using standard equation of Aggregate Supply (AS) and explain causes of inflation in terms of it. How does expectation augmented Phillips curve explain Stagflation?
