Suppose the economy is hit by a positive AD shock that puts the economy is a short-run equilibrium above potential output. If there is no policy response, the economy's self-adjustment mechanism will cause wages and price expectations to will be the economy's return to potential output. and the expectations adjust, the quicker O decrease, slower O decrease, quicker O increase, slower O increase, quicker If an aggregate demand shock initially decreases investment spending by $80 billion and the MPC equals .6, then O in the short-run, the AD curve shifts to the right by $32 billion O in the short-run, the AD curve shifts to the right by $80 billion O in the short-run, the AD curve shifts to the right by $200 billion O in the short-run, the AD curve shifts to the right by $48 billion

Q: The present value of a perpetuity paying $20 at the end of every four years is $43. Find i.

A:

Q: POSSIBLE PO Sofia receives a text message from her bank. All of the following indicate that the text…

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Q: Explain the main structure of a proposal and discuss what kinds of content should be included. What…

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Q: f an insured purchases an Annuily from which income is received, the insured is the receiver…

A: Answer is given below

Q: How is the future related to the present value of a single sum?

A: The future value is that the sum of present value and also the total interest. the long run value…

Q: I heard that t = 66 months, is this true or false?

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Q: What is fractional ownership?

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Q: What is the Decision Rule for simple Investments?

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Q: If your receive $500 in simple interest on a loan that you made for $10,000 for 5 years, what was…

A: here we calculate the interest rate charged which are as follow-

Q: What will be the Savings given that income is $3200 and APS is 0.48

A: The data presented in the question above is:- Income = $3200 Average propensity to save = 0.48…

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A: The objective of the question is to find out how much Faith will owe Luis after they buy season…

Q: could you show how to determine the bond's present value without a calculator?

A: When interest rate rises to 4%: Given, Face value= future value= $1,000 Yield to maturity= 4% Time=…

Q: Calculate the simple interest earned. Round to the nearest cent. P = $3000, r = 3.1%, t = 23 days

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Q: What are other ways to invest in Real estate? Are they long term or short term?

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Q: What is the Deferred Savings Plan?

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Q: What is the U.S 6 month interest rate?

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Q: Suppose you are considering an investment project that requires $800,000, has a six-year life, and…

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Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.