Does it appear that the economy has strengthened or weakened over the past year?The market interest rate increased by 2.0%, and the amount of capital borrowedWhich of the following factors could be responsible for the change in demand shown in the graph?O New technological advances opened up more production opportunities for businesses.O Households began saving a greater percentage of their income.The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money supply.Expected inflation decreased.O WeakenedStrengthened.8.05%byIf the inflation rate was 2.00% and the nominal interest rate was 9.00% over the last year, what was the real rate of interest over the last year?Disregard cross-product terms; that is, if averaging is required, use the arithmetic average.8.75%billion.5.95%O 7.00% 5. Themarket for capitalThe following graph shows the supply of and demand for capital in a market over the last year. You can see that the demand for capital has increasedover the last year (the demand curve shifted to the right).INTEREST RATE, r (Percent)201816141222D1D22468 10 12 14 16QUANTITY OF MONEY (Belions of dollars)Supply18 20?

Demand is defined as the desired back by willingness and ability to pay by an individual.It depends…

Does it appear that the economy has strengthened or weakened over the past year? Weakened Strengthened The market interest rate increased by 2.0%, and the amount of capital borrowed Which of the following factors could be responsible for the change in demand shown in the graph? O New technological advances opened up more production opportunities for businesses. O Households began saving a greater percentage of their income. The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money supply. Expected inflation decreased. O 8.05% If the inflation rate was 2.00% and the nominal interest rate was 9.00% over the last year, what was the real rate of interest over the last year? Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. 8.75% by 5.95% billion. O 7.00%

Does it appear that the economy has strengthened or weakened over the past year? Weakened Strengthened The market interest rate increased by 2.0%, and the amount of capital borrowed Which of the following factors could be responsible for the change in demand shown in the graph? O New technological advances opened up more production opportunities for businesses. O Households began saving a greater percentage of their income. The Federal Reserve (the Fed) decided to relax its monetary policy and expanded the money supply. Expected inflation decreased. O 8.05% If the inflation rate was 2.00% and the nominal interest rate was 9.00% over the last year, what was the real rate of interest over the last year? Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. 8.75% by 5.95% billion. O 7.00%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Real wage X Figure 5: The supply side of the economy Output WS PS Consider Figure 5, which represents the supply side of the economy. Which point on the diagram, matches this description of what is happening: Real wages are on a rising trend
1. In the following table, determine how each event likely effects potential output (a.k.a., long-run aggregate supply). Direction of Potential Output Shift Event Left Right No Shift The government allows more immigration of working-age adults. For environmental and safety reasons, the government requires that the country’s nuclear power plants be permanently shut down. An investment tax credit increases the rate at which firms acquire machinery and equipment. 2. In the following table, determine how each event affects the position of the aggregate demand curve. Direction of AD Curve Shift Event Left Right No Shift A decrease in consumer confidence (suggests people believe a contraction/recession coming) A decrease in individual income tax rates An increase in the value/price of housing 3. What effect would an increase in aggregate demand…
changes in step with the price level to Long run aggregate supply is the relationship between the quantity of real GDP supplied and the price level when the maintain full employment O A. interest rate O B. real wage rate O C. money wage rate O D. quantity of money Short-run aggregate supply is the relationship between the quantity of supplied and the when the money wage rate, the prices of other resources, and potential GDP remain constant O A. potential GDP, price level O B. real GDP, price level O C. nominal GDP, exchange rate O D. real GDP, interest rate
33. Refer to Figure 4. As the_____decreases, the amount of ____demanded by all sectors of the economy_____
2. Consider the money market model. If the current price is higher than the equilibrium price, would the money demand greater or smaller than the money supply? And how would the value of money will change in the adjustment toward the equilibrium? Decrease or Increase. Money demand(greater:smaller):Value of money (increase/decrease):
If there is excess demand for goods and services in the economy at the current price level, then the: If there is excess demand for goods and services in the economy at the current price level, then the: A. price level will remain the same B. GDP will fall C. price level will increase D. price level will decrease
28. Which of the following are determinants of aggregate demand? Choose all that apply. A. a spike in net exports B. the Federal Reserve lowering its interest rates C. a change in technology D. growing consumer confidence
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