Submit HW_Chapter10&11 _ Gradescope

pdf

School

University of California, Berkeley *

*We aren’t endorsed by this school

Course

101B

Subject

Economics

Date

Feb 20, 2024

Type

pdf

Pages

Uploaded by bcchegg

HW_Chapter10&11

Q1 3 Points Assume the monetary policy curve is given by r = 1.5 + 0.5π. Calculate the real interest rate when the inﬂation rate is 3%, 5%, 6% (Enter as whole number, with one decimal place) Q1.1 1 Point When the inﬂation rate is 3%, the interest rate is __% Save Answer Q1.2 1 Point When the inﬂation rate is 5%, the interest rate is ____%. Save Answer Q1.3 1 Point When the inﬂation rate is 6%, the interest rate is ____%. Save Answer

Q2 1 Point Assume that the central banks changes its nominal policy rate setting rule (its monetary policy curve) of r = 1 + 0.75π to: r = 2.25 + 0.75π. Does the new rate setting rule represent an autonomous tightening or loosening of monetary policy? Save Answer The new monetary policy curve represents a tightening of monetary policy. The new monetary policy curve represents a loosening of monetary policy. Monetary policy does not change. It is not possible to determine the answer without additional information.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Q3 4 Points Suppose the rate setting rule (monetary policy curve) is given by r = 1 + 0.5π , and the IS curve is Y = 13 − r. Find the expression for the aggregate demand curve. Calculate aggregate output when the inﬂation rate is 3%, 4%, and 5% (Round your responses to one decimal places. ) Q3.1 1 Point The aggregate demand curve is Save Answer Q3.2 1 Point When the inﬂation rate is 3%, aggregate output is ____. Save Answer

Q3.3 1 Point When the inﬂation rate is 4%, aggregate output is ____. Save Answer Q3.4 1 Point When the inﬂation rate is 5%, aggregate output is ____. Save Answer Q4 1 Point What would be the effect of a decrease in U.S. net exports on the aggregate demand curve? Save Answer The aggregate demand curve shifts to the left. The slope of the aggregate demand curve decreases. The aggregate demand curve shifts to the right. The aggregate demand curve does not shift.

Q5 1 Point Would a decrease in net exports affect the monetary policy curve? Save Answer No, the monetary policy curve does not shift. Yes, the monetary policy curve shifts to the left. Yes, the monetary policy curve shifts to the right. Yes, the slope of the monetary policy curve decreases.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Q6 2 Points Suppose that a new Fed chair is appointed, and his or her approach to monetary policy can be summarized by the following statement: "I care only about increasing employment; inﬂation has been at very low levels for quite some time; my priority is to ease monetary policy to promote employment." Q6.1 1 Point How would you expect the monetary policy curve to be affected, if at all? Save Answer Q6.2 1 Point What would be the effect on the aggregate demand curve? Save Answer The MP curve will shift upward because decreasing unemployment results in a loosening of monetary policy. The MP curve will shift downward because decreasing unemployment results in a loosening of monetary policy. The MP curve will shift upward because decreasing unemployment results in a tightening of monetary policy. The MP curve will shift downward because decreasing unemployment results in a tightening of monetary policy. The slope of the AD curve will increase. The AD curve will shift to the right. The AD curve will not change. The AD curve will shift to the left.

Q7 3 Points 7. Assume that the demand for real money balances is given by Md/P = Y/5 − 100i . Suppose that Y = 10,500 billion, so that Md/P= 10,500/5 − 100i (in billions of $). Calculate the demand for real money balances if the interest rate is 6 %, 3 %, and 1 %, respectively. Q7.1 1 Point If the interest rate is 6%, the demand for real money balances is $ ____ billion. Save Answer Q7.2 1 Point If the interest rate is 3%, the demand for real money balances is $ ____ billion. Save Answer

Q7.3 1 Point If the interest rate is 1%, the demand for real money balances is $____ billion. Save Answer Q8 1 Point Suppose the economy experiences an increase in aggregate output. How would this event affect the demand curve for real money balances? Save Answer The MD curve does not shift. The slope of the MD curve increases. The MD curve shifts to the right. The MD curve shifts to the left.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Q9 2 Points Assuming the demand for real money balances is given by Md/P= Y/6 − 100i. Q9.1 1 Point a) Find the equilibrium interest rate if the money supply is $1,700 billion and output equals $12,600 billion. The equilibrium interest rate is ____%. Save Answer Q9.2 1 Point b) Find the new equilibrium interest rate if the money supply is $1,700 billion and output increases to $13,800 billion. The equilibrium interest rate is ____%. Save Answer

Q10 1 Point Consider the money market. Suppose that the U.S. economy finally recovers from the 2007 crisis and aggregate output increases. Describe the effect on the interest rate if the Federal Reserve decides to increase the money supply at the same time that aggregate output increases. Save Answer The interest rate will decrease because the money demand curve will shift to the left. The interest rate will probably increase because the money supply curve will probably have a relatively small shift. The interest rate will increase because the money demand curve will shift to the right. The interest rate will probably decrease because the money supply curve will probably have a relatively large shift.

Q11 1 Point The information below describes the inﬂation and unemployment rates for Canada between 1960 and 1969. Numbers have been rounded to the nearest 0.25 of a percentage point and plotted on the graph to the right.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Save Answer a positive relationship between inﬂation and unemployment, contrary to what the Phillips curve predicts. a positive relationship between inﬂation and unemployment, as the Phillips curve predicts. a negative relationship between inﬂation and unemployment, contrary to what the Phillips curve predicts. a negative relationship between inﬂation and unemployment, as the Phillips curve predicts.

Q12 1 Point The graph below shows combinations of inﬂation and unemployment rates for Canada during the period between 1970 and 2009. The graph _ evidence in favor of the Phillips curve for Canada for this period. Save Answer provides does not provide

Q13 3 Points Suppose that the expectations-augmented Phillips curve is given by the following formula: π = π^e − 0.5(U − Un) If expected inﬂation is 3% and the natural rate of unemployment is 6%, calculate the inﬂation rate according to the Phillips curve for each unemployment rate listed. Q13.1 1 Point If unemployment is 4%, the Phillips curve would predict an inﬂation rate of ____ percent. (Response as a whole number) Save Answer Q13.2 1 Point If unemployment is 5%, the Phillips curve would predict an inﬂation rate of ____ percent. (Round your response to one decimal place.) Save Answer

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Q13.3 1 Point If unemployment is 6%, the Phillips curve would predict an inﬂation rate of ____ percent. (Response as a whole number) Save Answer Q14 1 Point During 2007 the U.S. economy was hit by a price shock, when the price of oil increased from around $60 per barrel to around $130 by June 2008. Whereas inﬂation increased during fall 2007 (from around 2.5% to 4.0%), unemployment did not change significantly (it even slightly increased during 2007). The modern Phillips curve concept would explain this phenomenon as Save Answer an upward shift in the Phillips curve from a negative price shock (an increase in oil prices). a downward shift in the Phillips curve from a negative price shock (an increase in oil prices). an upward shift in the Phillips curve from a positive price shock (an increase in oil prices). a downward shift in the Phillips curve from a positive price shock (an increase in oil prices).

Q15 3 Points Assume Okun's law is given by the following: U − Un = − 0.75 * (Y-Y^p) and that the Phillips curve is given by the following: π = π^e − 0.6 * (U-Un) + ρ If expectations are adaptive, inﬂation was 4% last year, there is a price shock such that p = 0 , and potential output is $11 trillion, then the short- run aggregate supply curve would be written as follows: π = 4 + 0.45 * (Y - 11) + 0 Use the equation above to calculate each of the following. Q15.1 1 Point If output is $8 trillion, then inﬂation is ____ %. (Round your response to one decimal place.) Save Answer Q15.2 1 Point If output is $10 trillion, then inﬂation is ____ %. (Round your response to one decimal place.) Save Answer

Q15.3 1 Point If output is $12 trillion, then inﬂation is ___ %. (Round your response to one decimal place.) Save Answer Q16 1 Point Although Okun's law holds for different countries, more ﬂexible labor markets result in a higher response of unemployment to changes in GDP. During the recent crisis real GDP decreased in the United States, Germany, and France. Considering that the U.S. labor market is more ﬂexible than European labor markets it seems most likely that the change in unemployment would be largest in (1)____ . Save Answer the United States France Germany

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Q17 1 Point Internet sites that allow people to post their resumes on line reduce the cost of job search and create opportunities for individuals looking for jobs to be matched with potential employers more quickly. Assume that these uses of the Internet reduce the average amount of time people are unemployed. Assuming the above information is true, we can infer that the natural rate of unemployment has (1)____ . Save Answer Save All Answers Submit & View Submission  not affected decreased increased

Submit HW_Chapter10&amp;11 _ Gradescope

Related Documents

Submit HW_Chapter10&11 _ Gradescope