Quantity ofNominal interest rate money demandedQuantity ofmoney supplied(percent per year) (trillions of dollars) (trillions of doll ars)2.92.52.82.52.72.582.62.59.2.52.5102.42.5The above table has the demand and supply for money. What is the equilibrium nominal interest rate?O a.7 percentO b. 6 percentO c.9 percentO d. 5 percentO e.8 percent

The equilibrium nominal interest rate could be defined with the intersection between the demand and…

Quantity of Nominal interest rate money demanded Quantity of money supplied (percent per year) (trillions of dollars) (trillions of doll ars) 2.9 2.5 6 2.8 2.5 2.7 2.5 8 2.6 2.5 9. 2.5 2.5 10 2.4 2.5 The above table has the demand and supply for money. What is the equilibrium nominal interest rate? O a. 7 percent O b. 6 percent Oc. 9 percent O d. 5 percent O e. 8 percent

Quantity of Nominal interest rate money demanded Quantity of money supplied (percent per year) (trillions of dollars) (trillions of doll ars) 2.9 2.5 6 2.8 2.5 2.7 2.5 8 2.6 2.5 9. 2.5 2.5 10 2.4 2.5 The above table has the demand and supply for money. What is the equilibrium nominal interest rate? O a. 7 percent O b. 6 percent Oc. 9 percent O d. 5 percent O e. 8 percent

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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these multiple choice Questions from MACROECONOMICS Course.I need the final answer,please.
estion 2 Suppose that the demand for real mopey balances depends only on the real interest rate (and not on real income). What is'the slope of the LM curve? Explain. In this case, show how an increase in the real money supply affects the resulting LM curve
Cash: $129.25 billion Checking deposits: $207.4 billion Saving accounts: $273.5 billion Small denomination time deposits: $27.3 billion Bank reserves held at the Fed: $43.0 billion Suppose that in a certain economy, the above are the only forms of money. How big is the monetary base (MB)? O a. $508.20 billion O b. $364.15 billion O c. $610.15 billion O d. $316.50 billion O e. $172.25 billion O f. $653.15 billion
Which point/s represent an equilibrium in the goods market? a. A only O b. A and D O c. A and C O d. All of the above Which point/s represent an equilibrium in the money market? O a. A and D O b. All of the above O c. A only O d. A and C A decrease in autonomous spending will decrease the equilibrium interest rate. O a. False; keep O b. False; increase O c. False; not affect because autonomous spending is not related to interest rate O d. True
Consider a situation where the central bank increases the money supply. equal, if nominal GDP increased by $800 billion during a time when veloc did the central bank increase the money supply? O $400 million O $200 million O $200 billion O $400 billion No new data to save. Last check
The graph below shows the monetary rule curve for the country of HOYA. According to this rule, the Central Bank will react to a rise in the current inflation rate from 0.5% to 1.5% by 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0.2 0.4 0.6 0.8 1.2 1.4 1.6 1.8 inflation (n) Real federal funds rate (R) 2.
6. Monetary policy in the long run Consider a hypothetical economy that produces at its long-run macroeconomic equilibrium at a price level of 100. Suppose the real GDP of this economy grows at an annual rate of 2%. If the velocity of money is constant, the central bank can maintain the price level at 100 by means of which of the following? Expanding the money supply by 2% per year O Reducing the money supply by 2% per year les of O Keeping the money supply constant Suppose the central bank enacts an unanticipated restrictive monetary policy. As a result, the supply of loanable funds leading to a in short-term interest rates. The following graph shows the goods and services market of this economy at full employment. Assume that potential output remains constant. Adjust the graph to show the long-run effect of an unanticipated restrictive monetary policy on the goods and services market by dragging the 511 8/2/ aggregate demand (AD) curve, the short-run aggregate supply (AS) curve, or…
Question 32 If you are told that a country's nominal GDP decreased and its real GDP decreased over the same block of time, which of the following can you conclude with certainty? o The economy had inflation. O None of the choices listed is correct since none can be concluded with certainty. o The economy's price level remained constant. O The economy had disinflation o The economy had deflation. Question 33 Assume the economy of a trading partner enjoys a high rate of growth, interest rates in the economy decrease, and there is an improvement in productivity. Which of the following is correct? o The equilibrium price level will definitely decrease. O The equilibrium price level will definitely increase. o The equilibrium real GDP will definitely decrease. O The equilibrium real GDP will definitely increase.
Please help with this practice question
12. Inflation-induced tax distortions Loc receives a portion of his income from his holdings of interest-bearing U.S. government bonds. The bonds offer a real interest rate of 4.5% per year. The nominal interest rate on the bonds adjusts automatically to account for the inflation rate. The government taxes nominal interest income at a rate of 10%. The following table shows two scenarios: a low-inflation scenario and a high- inflation scenario. Given the real interest rate of 4.5% per year, find the nominal interest rate on Loc's bonds, the after-tax nominal interest rate, and the after-tax real interest rate under each inflation scenario. Inflation Rate Real Interest Rate Nominal Interest Rate After-Tax Nominal Interest Rate After-Tax Real Interest Rate (Percent) (Percent) (Percent) (Percent) (Percent) 3.5 4.5 8.5 4.5 Compared with lower inflation rates, a higher inflation rate will nominal interest income. This tends to the economy's long-run growth rate. saving, thereby the after-tax…
1
Suppose the U.S. economy is in equilibrium at a potential output of $10 trillion so that unemployment is at the natural rate. At the beginning of the year, the Federal Reserve announces that its monetary policy will aim to maintain output at potential output and sustain the current price level throughout the year. Firms and workers negotiate annual wage and resource price agreements based on the belief that the Fed is committed to price stability. The following graph shows the aggregate demand curve (AD), the long-run aggregate supply curve (LRAS), and the short-run aggregate supply curve (SRAS) at an expected price level of 120. Now suppose that several months later, the Fed abandons its stated goal of price stability and shifts toward an expansionary monetary policy. On the following graph, show the short-run effect of this policy by shifting the appropriate curve or curves. Note: Select and drag one, both, or all of the curves to the desired position. Curves will snap into position,…