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- 14. If the expected inflation rate is 5% and negotiators agree that the real wages should rise by 7%, the two sideswill agree to an increase in the money wage ofA 2%B 5 %C 7 %D 12%In a particular economy the real money demand function is Real Interest Rate, r (%) 0.451 M 0.40- 3,000 + 0.10Y-9,000i. P 0.35- Assume that M = 7,000 and P = 2. Initially, expected inflation, zewas 0.02. Initially, when Y= 8000, the real interest rate of 0.013 cleared the asset market and when Y = 9000, the real interest rate of 0.024 cleared the asset market. The initial LM curve is drawn as 0.30- 0.25 0.20- LM,. 0.15- Now suppose that the expected inflation rate increases to 0.03. Using the new expected inflation rate, calculate the real interest rate that clears the asset market when Y = 8000. (Enter your answer in decimals, rounded to three decimals.) D. This is point C. 0.10- LM, 0.05- 0.00+ 7 8 10 Output, Y (thousands)suppose the diffrence between the transaction velocity and the income velocity of circulation of money in an economy is a 5 and the money value of total transaction 6 times the money value of aggregate income . if the quantity of money in circulation is 1000 currency unit , then the money value of aggregate income in currency unit is (a)1000 (b)1200 (c)1500 (D)1800
- A Suppose the difference between the transactions velocity and the income velocity of circulation of money in an economy is 5 and the money value of total transactions is 6 times the money value of aggregate income. If the quantity of money in circulation is 1000 currency units, then the money value of aggregate income in currency units is (a) 1000 (b) 1200 (c) 1500 (d) 1800Suppose the money demand function is = 1000 + 0.2Y - 1000 (r + πe). Required (a.) Calculate velocity if Y = 2000, r = 0.06, and πe = 0.04. (b.) If the money supply (Ms) is 2600, what is the price level? (c.) Now suppose the real interest rate rises to 0.11, but Y and Ms are unchanged. What happens to velocity and the price level? (d.) For part (c.), if the nominal interest rate were to rise from 0.10 to 0.15 over the course of a year, with Y remaining at 2000, what would the inflation rate be?1. Supposeyouhave$200,000inabanktermaccount.Youearn5%interestper annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses.2. TheAustralianBureauofStatistics(ABS)reportedinMay2017thatthecivilian population in Australia over 15 years of age was 20.8 million.Of this population of 20.8 million Australians, 13.5 million were employed and 0.7 million were unemployed.Calculate Australia’s labor force and the number of people in the civilian population who were not in the labor force? Also, with examples examine the causes of structural unemployment in Australia.
- Given that: Consumption C = 0.7Y+100 I = -40r +1000 Ms = 4300 L1 = 0.2Y L2 = -40r+ 230 Investment Money supply Transaction-precautionary demand for money Speculative demand for money %3D %3D :Value of interest rate (r) is 10 O 12 O 6 0 810 - Which of the following depends on the demand for money, which we say just in case and for this purpose?A) IncomeB) to KeynesC) to the economyD) to interestE) Investment15 ) Monetary Approach with a constant velocity Money supply growth has steady been 2% higher in Japan than in the US and output growth has steady been 2% lower in Japan than in the US. ThenO1 a) (E_S/Yen) has been rising by 4%02 b) (E_S/Yen) has been falling by 4%03 c) (E_S/Yen) has been invariant 04 d) real interest rate has been higher in JapanO5 e) two of (a)-(d)
- Considering the following data: Includes the procedure 2021 INPC April 103.531 March 103.476 February 103.079 January 103.108 (a) Currently (April 2021) you sell vases at a price of $ 14 pesos. You are going to request a loan which you must pay for the next five years. The condition that the bank asks you is that during the loan period the sale price of the vases is indexed to inflation. Considering the above, what would be the price under which you would sell your vases in April 2024? _______________Hint: You hired an economic consultant and he tells you that the expected CPI for April 2024: 154,745 Includes procedure (b) In 2000, the minimum wage was established to be $ 37.90 (The INPC for January 2000 was 44,931). If by law inflation is indexed to salary, what should the salary be for April 2021? ________________. Considering that the current salary (April 2021) is $ 102.68, we can conclude that with respect to the year 2000, the minimum salary that is paid in Mexico…Price stability: Suppose you are the head of the central bank and your mandateis to maintain the price level at a constant value. Explain what you would doto the money supply in response to each of the following events:(a) Real GDP increases by 4% during a boom.(b) Real GDP declines by 1% during a recession.(c) Real GDP is growing at 3% per year.(d) Te velocity of money increases by 2%.(e) Te velocity of money declines by 1%.If M = 3,500, P = 4.5, and Y= 6,000, what is velocity? O a. 8 %3D Ob.2 Ос. 2.25 d. 0.58