Question 29 Describe how the IS curve shifts in response to the following events: A. A fall in consumer confidence about the future, which induces consumers to spend less. The IS curve [Select] B. Many firms upgrade their computer systems after the invention of a new high-speed computer chip. The IS curve C. There is larger volume of cash transactions due to a wave of credit card fraud. The IS curve [Select] [Select] 1.5 pts
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- Question 4 Explain how does a decrease in the current income y affect the consumer's consumption-saving decision. In particular, explain: 1) How will current consumption c, future consumption c', and savings s change; 2) Are there any substitution effect or income effect. Make sure you draw two figures, one for the borrowers and one for the lenders.The table below shows the amount of savings and borrowing in a market for loans to purchase homes, measured in millions of dollars, at various interest rates. InterestRate QuantitySupplied QuantityDemanded5% 98 2216% 129 1917% 160 1608% 178 1429% 196 12410% 214 106 What is the equilibrium interest rate and quantity of loaned funds? r = % Q = Suppose there is a decrease in demand of money, what will happen to interest rates and quantity? Increase in Interest Rates, Increase in Quantity?Increase in Interest Rates, Decrease in Quantity?Decrease in Interest Rates, Increase in Quantity?Decrease in Interest Rates, Decrease in Quantity?Consider that the quantity of Milk A sold will increase by 50%, the sales revenue of Milk A will decrease by 25%, and the price is determined by sales revenue divided by quantity sold. Which of the following best describes the expected change in Milk A's price in April, compared to March? January February March Milk A Quantity Sold Sales Revenue Quantity Sold 500 800 400 $3,000 $4,400 $2,400 Milk B 1200 1500 950 Select the single best answer: A. increase by 25% B. decrease by 50% C. decrease by 25% D. decrease by 15% E. no change Sales Revenue $5,000 $6,000 $4,400 Quantity Sold Milk C 600 550 700 Sales Revenue $3,400 $3,300 $5,000
- Refer to the figure below: Insurance and pensions 11.9% Item a. Entertainment b. Transportation c. Clothing Housing 32.8% Item Weight 0.053 0.159 0.03 Entertainment 5.3% Transportation 15.9% Price Change 20% -8% 100% Health care 8.1% Source: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey (2018 data). Use the item weights in the figure to determine the percentage change in the CPI that would result from a(n) a. 20 percent increase in entertainment prices. b. 8 percent decrease in transportation costs. c. doubling of clothing prices. (Note: Review the table titled "Computing Changes in the CPI" in your text for assistance.) Instructions: Enter your responses as a percentage rounded to two decimal places. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Food 12.9% Impact on CPI (Inflation Effect) Clothing 3.0% Miscellaneous 10.1%Part C 3. The manager of a certain gasoline station wants to forecast the demand for the unleaded gasoline next month so that the proper number of gallons can be ordered from the distributor. The manager has accumulated the following data demand for unleaded gasoline from sales during the past eight months. Month Gasoline Demanded (gallons) Mar 900 Given that the forecast for March is 920. Apr 755 May 650 Jun 550 Jul 625 Aug 730 Sept 820 Oct 1 100 a. Compute the exponential smoothed forecast for the demand from April to November. Use a = 0.25. b. Compute the exponential smoothed forecast for the demand from April to November. Use a = 0.45. c. Plot the actual demand and the forecasts determined in part a and b on the same graph and compare them. d. Make a comparative analysis out of your answers in the plotted data. (3-5 sentences)Go to this website (http://www.measuringworth.com/ppowerus/) for the Purchasing Power Calculator at measuringWorth.com. How much money would it take today to purchase what one dollar would have bought in the year of your birth?
- Suppose Ford produced 10,000 Mustangs in the United States in 2016 and during 2016 sold 7,000 to U.S. customers and exported 2,000 to foreign buyers. How many Mustangs would the BEA count as investment spending by Ford in 2016? A) 10,000 B) 9,000 C) 7,000 D) 1,000 Only typed Answer3. Supply and demand for loanable funds The following graph shows the market for loanable funds in a closed economy. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. Supply Demand 100 200 300 400 500 LOANABLE FUNDS (Billions of dollars) A INTEREST RATE (Percent) m 0 0 600Course: Introduction to Microeconomics Topic: Intertemporal Consumption DecisionsA consumer makes decision to consume in this year and next year. This year she has an income of M1 = $ 1.5 million and next year her income will be M2 = $ 2.75 million. Interest rate is 10%. Her intertemporal preferences are represented by function U(c1, c2) = c1*c2, whose intertemporal marginal rate of substitution is IMRS = c2/c1.a) Find and graph Budget Constraintb) Find and graph optimal consumption basket and indicate whether the consumer SAVES or BORROWS in the FIRST YEAR.c) Indicate whether following statement is true or false: "Any increase in interest rate will cause a decrease in consumer's welfare" Justify.d) If next year's income is maintained, how much would this year's income have to be for consumer to neither save nor borrow money at 10% interest rate?e) How much would interest rate have to be for consumer to consume exactly her initial endowment (M1 = $ 1.5 million and M2 = $ 2.75…
- At its meeting ending on 2 February 2022, The Bank of England (BOE) Monetary Policy Committee (MPC) voted to increase interest rate. Consumers react this rise in the interest: rate and adjust their choices between spending today and spending tomorrow. Suppose that there are two consumers: 1) John is a saver, and he decides to increase his savings after the BOE policy: 2) Lili is a saver, and she decides to decrease her savings after the BoE policy. Use the Life-Cycle Model (LCM) to answer the following questions. a) Draw a diagram to show the optimal choice for John. Explain your answer and your diagram in detail.Savings (thousand) Consumption (thousands) 6 Panel A Consumption Move this point along C C Y=C+S O Macmillan Learning Adjust the interactive graph in order to observe the relationship between income, consumption, and saving changes as income increases. Use the graph to help you answer the following questions. 2 3 4 5 6 Panel Bincome (thousands) Savings 4 5 6 S Income (thousands) a. At an income of 4000, how much is consumed? How much is saved? Consumption = $ -500 Savings = $3500 O Consumption = $0 Savings $4000 = Consumption = $ 3500 Savings = $-500 O Consumption = $4000 Savings = $0Discuss three different possible techniques which a company can use to forecast the demand for its products.