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- 9-)Suppose that government decides to support the firms for their investments in research and the development.Assuming this support increases productivity in the economy, use aggregate demand and supply analysis to predict the short-run and long-run effects on inflation and output. Show these effects on a graph and explain the results in detail. IMPORTANT NOTE FOR THE QUESTION: DESCRIPTION ≠ EXPLANATION; So please DO NOT just write like “this curve shifts right or left etc.” as an explanation (I can see it on the graph), EXPLAIN “WHY” that curve shifts right or left and clearly write “WHAT” are the short-run and the long-run RESULTS of the shift(s) on inflation and output.)1A.) What do researchers mean when they ask “Why does monetary policy have real effects on the economy?" 1B.)Use the evidence in the table (image) to discuss the research main findings and its implications for macroeconomic policy.5) Suppose that: Mp = 800 + 0.2Y – 5000(r + n) P M5 = 1000 + 0.1Y – 3000n a. If n = 0.1 ;r = 0.1 ;Y = 2000, in equilibrium, what is the price level? b. What is the velocity? (using the same parameters as in a.) c. If output increases so that Y = 3000, what is the price level? d. What is the velocity? What is the change rate of the velocity? What does this number mean? e. Now, if a = 0.1 ;Y = 2000; and price level is forced to be P = 6, what is the equilibrium interest rate? f. What is now the velocity?
- 5-) Question : Variables expressed in terms of are called .. Variables ..... Please select one or more option: a) physcial units / endogenous b) exogenous units / real c) money / nominal d) physical units/ real e) endogenous units / nominal 6-) Question: . implies that an increase in . will increase umw m m a) neutrality of money / inflation / real interest rates b) inflation / prices / both saving and investment c) neutrality of money / the money supply / nominal interest rates d) inflation / prices / real GDP e) neutrality of money / the money supply / real interest rates524
- 7. Supply-side effects Consider a fictional economy that is operating at its long-run equilibrium. The following graph shows the aggregate demand curve (AD) and short-run aggregate supply curve (SRAS) for the economy. The long-run aggregate supply curve (LRAS) is represented by a vertical line at $6 trillion. The economy is initially producing at potential output. Suppose that fiscal authorities decide to decrease marginal tax rates. Assume that this change in marginal tax rates is perceived as a long-term change. Shift the appropriate curves to illustrate the supply-side view of the fiscal policy effect on output and the price level. (? 120 LRAS SRAS 100 AD 80 SRAS LRAS 40 AD 20 2 4 6 8 10 12 QUANTITY OF OUTPUT (Trillions of dollars) PRICE LEVELQUESTION 2 Suppose that the US government sets an economic goal to increase the Real GDP (base=2022) from $25,464 billion dollars to $38,196 billion dollars with an aggresive average annual rate of growth of 3%. How many years should it take for the US Economy to achieve this economic goal? Round up your answer to a whole number of years. B5. Supply-side effects Consider a fictional economy that is operating at its long-run equilibrium. The following graph shows the aggregate demand (AD) curve and short-run aggregate supply (AS) curve for the economy. The long-run aggregate supply curve is represented by a vertical line at the potential GDP level of $6 trillion. The economy is initially producing at potential GDP. Suppose that fiscal authorities decide to decrease marginal tax rates. Assume that this change in marginal tax rates is perceived as a long-term change. Shift the appropriate curves to illustrate the supply-side view of the fiscal policy effect on output and the price level. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther 8 100 8 PRICE LEVEL 8 9 8 True Potential GDP O False AS AD 10 QUANTITY OF OUTPUT (Trillions of dollars) 12 True or False! Supply side…
- question attached! (:estion 5 2 Which statement is CORRECT? By keeping actual output approximately equal to potential output, a nation's macro-policy makers risk producing employment problems. By keeping actual output approximately equal to potential output, a nation's macro-policy makers risk producing inflation problems. By keeping actual output above potential output, a nation's macro-policy makers can achieve the goal of high output. By keeping actual output approximately equal to potential output, a nation's macro-policy makers can achieve the goal of high output. O By keeping actual growth rate of output at its maximum pace, a nation's macro-policy makers can achieve the goal of high output. A Moving to the next question prevents changes to this answer. 4 % 5 JUL 20 tv 6 MacBook Pro & 7 *00 8 Nc 9PQ 27 How does an appreciation of a country's currency affect its aggregate supply curves, when imported intermediate inputs are sizable?