Click on the graph below to make it interactive and answer the following questions.Real interest rate5%4%3%2%1%0%-10%Shift the IS curve to the left until the new output gap is -5%.-5%Unexpected inflation(Inflation - Inflation expectations)1%0%-1%MP curveIS curve5%Output gapPhillips curve-2%-10%-5%0%5% powered bydesmosOutput gapAlter the interactive graph in order to witness how a leftward shift of the IS curve affects the output gap and unexpectedinflation. Use the information to forecast economic outcomes.a. Which of the following could explain the shift witnessed in the IS-MP framework and result in lower unexpectedinflation?Recent legislation that reduced government spending on infrastructure.Recent legislation that reduced taxes.An increase in financial market risk, leading to a negative output gap.Decreased consumer wealth stemming from depressed asset prices.Decreased business confidence recently revealed in a recent business confidence index estimate.Incorrect

IS-MP curve i.e. Investment saving and monetary policy curve. This curve represents relationship…

inflation. Use the information to forecast economic outcomes. дар a. Which of the following could explain the shift witnessed in the IS-MP framework and result in lower unex inflation? Recent legislation that reduced government spending on infrastructure. Recent legislation that reduced taxes. An increase in financial market risk, leading to a negative output gap. Decreased consumer wealth stemming from depressed asset prices. Decreased business confidence recently revealed in a recent business confidence index estimate. Incorrect

inflation. Use the information to forecast economic outcomes. дар a. Which of the following could explain the shift witnessed in the IS-MP framework and result in lower unex inflation? Recent legislation that reduced government spending on infrastructure. Recent legislation that reduced taxes. An increase in financial market risk, leading to a negative output gap. Decreased consumer wealth stemming from depressed asset prices. Decreased business confidence recently revealed in a recent business confidence index estimate. Incorrect

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q24 The natural rate of unemployment is generally assumed to be Select one: a. the rate of unemployment at which the expected inflation rate is zero b. the rate of unemployment at which the expected inflation rate is equal to the actual inflation rate c. the rate of unemployment at which the actual inflation rate is zero d. very close to zero percent since everyone who wants to work is already working
With the aid of graphs, explain: (a) demand-pull inflation (b) cost-push inflation.
a) Explain the difference between calculation of inflation through CPI and through the GDP deflator. Hint: think about which type of goods are considered for calculating inflation in each case.
Inflation target are based on the assessment of the monetary condition of the economy. *TRUE or FALSE
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“state three reasons why voters should care about high inflation and evaluate the merit of the arguments"
Activity • Discuss which policies can be implemented in the following situations along with the justifications. • To control the inflation rate • To reduce the income distribution disparities • To increase the investments in construction sector • To encourage the individuals to spend more on consumption • To enhance the government revenue To control imports To reduce unemployment
If workers push for higher wages and receive them, could this create inflation? If so, what kind of inflation would this create? Aim for Clarity and Precision in your post • The answer requires material relevant to the topic we have just covered • It is asking for your 'informed' opinion; opinion based on what you have just learned • The precision of language and content is very important to convey what you want to say
Suppose both nominal GDP rises by 10 percent and real GDP rise by 2percent. What has happened to the general price level? What is the inflationrate? Show your calculation.
Expected inflation is 3%, and initially the output gap is zero (percent). A(surprise) tariff reduction on imported steel and aluminum- which are used widely in domestic production-results in (unexpected) cost-push inflation of -0.5%. Imports rise, leading to (unexpected) demand-pull inflation of -0.25%. The economy's actual rate of inflation is: A. 2.25% B. 2.50% C. 2.75% D. 3.00% E. 3.75%
q22- If there is inflation Select one: a. production is rising but prices are held constant b. the CPI is falling c. real GDP grows faster than nominal GDP d. nominal GDP grows faster than real GDP
If an economy is achieving the goals of full employment and price level stability, then: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a b C the unemployment rate is equal to the natural rate of unemployment and inflation rate is in the range of 2%. both the unemployment rate and the inflation rate must be equal to 0%. all people willing and able to work have a job and nominal incomes are increasing by at least the rate of inflation. Your answer it is likely that the economy is on the brink of a recession because the two goals cannot be met at the same time.