Answered: Question ONE (a). Briefly discuss the…

Question ONE (a). Briefly discuss the following concepts ii. . iii. Monetary neutrality iv. Government expenditure multiplier

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter14: Macroeconomic Policy: Tradeoffs, Expectations, Credibility, And Sources Of Business Cycles

Section: Chapter Questions

Problem 11E

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面 6Edit & eate answer both please Barter exchange is typically driven out by a money exchange system because money exchange allows more specialization. money exchange increases the amount of goods and services available in the cconomy. money exchange requires a double coincidence of wants. all of the above. only a and b above. When taxes decrease, disposable income increases, so consumption and aggregate demand increase increases, so consumption and aggregate demand decrease. decreases, so consumption and aggregate demand decrease. decreases, so consumption and aggregate demand increase. re to search 20°C
How does Stephanie Kelton’s explanation of Modern Monetary Theory4 (MMT) affect your view of government spending? Provide specific examples and describe how MMT contributes to your understanding.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The money supply has risen, but total spending has declined. Is this state of affairs possible? Explain your answer.
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Consider a closed economy where the goods and money markets are described by the following relationships: C = 200 + 0.9(Y – T) 1 = 400 – 15r M = 200 + Y – 100r G = 150 T = 100 M = 2000 P = 2 Where Cis planned consumption, / is planned investment spending, Tis government tax revenues, G is government purchases, M is the money supply, P is the price level and r is the interest rate. Department of Economics a) Derive the two expressions for the IS and LM equilibrium relationships respectively. Sketch a graph of the two relationships. b) Calculate the equilibrium value of output Y and interest rate r (round off your answers to one decimal point). Compute also the level of consumption and investment spending in equilibrium and check whether the actual level of spending matches the equilibrium level of output.
PAKISTAN ECONOMY
1. A fiscal expansion coupled with a monetary expansion must always causea) Output to riseb) Output to fallc) Interest rates to rised) Interest rates to fall 2. Autonomous consumption isa) a function of disposable incomeb) a function of national incomec) a function of GDPd) a function of savinge) independent of the level of income 3. Monetary policy loses its effectiveness in all of the following situations EXCEPTa. When the IS curve is vertical.b. When the LM curve is nearly horizontal.c. When interest rate controlled by the Fed reaches zero.d. When the IS curve is horizontal. 4. In a small open economy, if the government adopts a policy that lowers imports, then that policy: a) raises the real exchange rate and increases net exports. b) raises the real exchange rate and does not change net exportsc) raises the real exchange and decreases net exportsd) lowers the real exchange rate 5. An increase in the trade surplus of the a small open economy could be the result of a. a domestic…
Pls help with below homework. Draw a Hicks-Hansen diagram What happens when the supply of money and public spending decreases? Identify the sector in which effective demand exceeds production and where at the same time the demand for money is less than its supply. Show how the equilibrium situation will be reached eventually.
Explain how an increase in government expenditure can affect the goods market and moneymarket by taking the link between the two markets into account.
YEAR POTENTIAL GDP REAL GDP PRICE LEVEL 2020 $1500 billion $1500 billion 100 2021 $1590 billion $1560 billion 105 Refer to the table above to answer the questions below: a) Explain whether a contractionary or an expansionary fiscal or monetary policy should be implemented in 2021. b) Based on you answer to part a) above, identity one monetary and fiscal policy instrument. c) If the economy is successful in keeping real GDP at its potential level in 2021, state whether each of the following will be higher, lower, or the same if this economy had taken no action. i Real GDPii Potential GDPiii The inflation rateiv The unemployment rate d) Now let us suppose that real GDP in 2021 was higher than the potential GDP in 2021. What would your answer to part a) and part b) be under this scenario?