QUESTION 5 "Suppose the parameters of the IS curve are a-0,b-3/4, and r= 2%. Suppose further that initially the real interest rate R-2%. Draw the diagram for the IS curve and recall "a"" is a collection of terms (aC, aG, and so on). Suppose the real interest rate rises by 2 percentage points, from 2% to 4%. What will happen to SRO?" Decrease by 1 percentage point Increase by 1 percentage point Decrease by 2 percentage points Increase by 2 percentage points Decrease by 1.5 percentage points Increase by 1.5 percentage points QUESTION 6 "Suppose the parameters of the IS curve are a 0,b=3/4, and r = 2%. Suppose further that initially the real interest rate R-2%. Draw the diagram for the IS curve and recall "a" is a collection of terms (aC, aG, and so on). Suppose the government announces a temporary elimination of the sales tax. As a result, aC increases by 1 percentage point, from 70% to 71%. Assuming the Fed keeps interest rates constant, what will happen to SRO?" Decrease by 1 percentage point Increase by 1 percentage point Decrease by 2 percentage points Increase by 2 percentage points Decrease by 1.5 percentage points Increase by 1.5 percentage points

QUESTION 5 "Suppose the parameters of the IS curve are a-0,b-3/4, and r= 2%. Suppose further that initially the real interest rate R-2%. Draw the diagram for the IS curve and recall "a"" is a collection of terms (aC, aG, and so on). Suppose the real interest rate rises by 2 percentage points, from 2% to 4%. What will happen to SRO?" Decrease by 1 percentage point Increase by 1 percentage point Decrease by 2 percentage points Increase by 2 percentage points Decrease by 1.5 percentage points Increase by 1.5 percentage points QUESTION 6 "Suppose the parameters of the IS curve are a 0,b=3/4, and r = 2%. Suppose further that initially the real interest rate R-2%. Draw the diagram for the IS curve and recall "a" is a collection of terms (aC, aG, and so on). Suppose the government announces a temporary elimination of the sales tax. As a result, aC increases by 1 percentage point, from 70% to 71%. Assuming the Fed keeps interest rates constant, what will happen to SRO?" Decrease by 1 percentage point Increase by 1 percentage point Decrease by 2 percentage points Increase by 2 percentage points Decrease by 1.5 percentage points Increase by 1.5 percentage points

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Measuring The Cost Of Living

Section: Chapter Questions

Problem 9PA

See similar textbooks

Similar questions

Solve these 2 practice problems. Info for the 1.
3
Suppose the real interest rate is 3% and expected inflation is 3%. What is the nominal interest rate? nominal interest rate: = I All else equal, if inflation decreases by 0%, what will happen to the nominal interest rate? o The real interest rate will decrease by 0%. o The nominal interest rate will decrease by 0 %. o The nominal interest rate will increase by 0%. o The real interest rate will increase by 0%. 1 What do economists call the relationship between the nominal interest rate and the inflation rate? o shoeleather costs Leontief paradox 86 • Taylor rule Fisher equation
67
5. Suppose the value of corn a household produces is the equivalent of 60 percent of its income and the value of the corn it consumes is the equivalent of 30 percent of its consumption expenditure. Household also earns 30% of their income from selling their family labor and does not purchase any labor. If the price of corn decreases by 40 percent and wage rate increases by 20 percent, calculate: a. Net rice sales as fraction of total consumption expenditure? b. Percentage effect on real purchasing power?
QUESTION 3 If nominal interest rate increased by 0.2 percentage points and inflation increased by 0.4 percentage points, then the real interest rate O A. increased by 0.2 percentage points O B. increased by 0.4 percentage points O C. decreased by 0.2 percentage points O D. decreased by 0.4 percentage points
5. Explain why most macroeconomists do not need to precisely measure the initial capital stock in their data in order to good idea of the recent size (value) of the capital stock. For example how could an extended data set on investment be used to create an estimate for the capital stock. Your answer should have an equation in it and explanation of which variables are measurable and if so how they are typically measured
Firms require capital to invest in productive opportunities. The best firms with the most profitable opportunities can attract capital away from inefficient firms with less profitable opportunities. Investors supply firms with capital at a cost called the interest rate. The interest rate that investors require is determined by several factors, including the availability of production opportunities, the time preference for current consumption, risk, and inflation. Suppose the Federal Reserve (the Fed) decides to tighten credit by contracting the money supply. Use the following graph by moving the black X to show what happens to the equilibrium level of borrowing and the new equilibrium interest rate. INTEREST RATE, r (Percent) 0 16 0 D S2 CAPITAL (Billions of dollars) S1 8 Equilibrium
Q17
Typed and correct answer please. I ll rate accordingly.
Suppose a person's nominal income increases by 8% while the price level in the economy increases by 10%. In this case, the person's real income: O increased by 18% A) increased by 2% O decreased by 2% O decreased by 18%
Which sequence of events describes what is happening here? Real interest (%) azes SN SN new A Quantity of Saving and Investment in real $ bns p.SN=0.1 T.SN=T. Firms receive an investment tax credit, which reduces r and promotes growth. O b. Government increases spending, which increases national saving, lowers real interest rates, promotes investment and growth. O c. Government reduces spending, which decreases national saving, raises real interest rates, reduces investment and growth. O d. None of the answers offered are accurate. Oe Government reduGes snending which increases national saving loweES real interest rates, promotes G Search or type URL %23 2 8. Y R. 1. A. C. B.