Please help me with these questions with explanation **Question:**Consider the IS-MP model represented below when the economy is in a long-run equilibrium. In such a long-run equilibrium, short-run output, \( \tilde{Y} \), is equal to ____ and the real interest rate, \( R \), is equal to ____.Options:- a. 0; marginal product of capital- b. 1; depreciation rate- c. Potential output, \( \bar{Y} \); investment rate- d. 100; the inflation rate- e. Actual output, \( Y \); The fed Funds rate**Graph Description:**The graph shows an IS-MP model with the following elements:1. **Axes:** - The vertical axis is labeled \( R \), representing the real interest rate. - The horizontal axis is labeled \( \tilde{Y} \), representing short-run output.2. **Curves:** - The red line is labeled IS and slopes downward, representing the relationship between interest rates and output in the goods market. - The blue horizontal line is labeled MP, representing the monetary policy curve.3. **Equilibrium Point:** - The intersection of the IS curve and the MP curve indicates equilibrium in the market.4. **Unknown Values:** - Question marks indicate unknown values on both the axes.This graph models the intersection of monetary policy and output levels, illustrating the dynamic adjustments based on changes in interest rates and economic output. 11. Consider the IS-MP model. Following an increase in the marginal product of capital, the IS curve ____ and the MP curve ____.a. Shifts to the left; Shifts downward b. Shifts to the right; Does not shift c. Does not shift; Shifts upward d. Shifts to the left; Shifts upward e. Does not shift; Shifts downward

Introduction The IS/MP Model The IS/MP Model replaces the LM curve in the IS/LM Model with a…

3. Consider the IS-MP model represented below when the economy is in a long-run equilibrium. In such a long- run equilibrium, short-run output, Ỹ, is equal to and the real interest rate, R, is equal to a. 0; marginal product of capital d. 100; the inflation rate b. 1; depreciation rate e. Actual output, Y; The fed Funds rate C. Potential output, Ỹ; investment rate

3. Consider the IS-MP model represented below when the economy is in a long-run equilibrium. In such a long- run equilibrium, short-run output, Ỹ, is equal to and the real interest rate, R, is equal to a. 0; marginal product of capital d. 100; the inflation rate b. 1; depreciation rate e. Actual output, Y; The fed Funds rate C. Potential output, Ỹ; investment rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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