do fast i will 5 upvotes. The economy begins in long-run equilibrium. Then one day, the president appoints a new Fed chair, who is well known for holding the view thatinflation is not a major problem for an economy.Note: You will not be graded on any changes you make to the following graph, but you may use it to help you understand the scenario described.Price LevelLRASQuantity of OutputAggregate SupplyAggregate DemandAggregate DemandAggregate SupplyLRAS(?)

Answered: The economy begins in long-run…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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The consumption function for a closed economy with no government sector is given by theequation:C = £200 million + 0.8 Ywhere C is aggregate consumption and Y is national income.(i) Calculate the value of aggregate savings if the level of national income is £4000 million.(ii) Calculate the equilibrium level of national income if the level of planned investment is£600 million(iii) Calculate the level of aggregate consumption at the equilibrium level of nationalincome if the level of planned investment is £1000 million(iv) Calculate the change in national income if planned investment rose from £600 millionto £800 million
(3) How to interpret relationship between changes of GDP growth rate and unemployment rate? Now go to your notes (slides). Is the relationship you plotted similar as the Okun's Law predicts? Suppose you got a relation as GDP = a + b * UNemp, Are the coefficients of a and b are close to the value of Okun's Law? (4) Now repeat the plot you did in part (2) above. However, this time you use the sample only from 2000 to 2019. Any change to the relationship? How is the value of a and b in this sample?
Consider a market equilibrium with price p₁= $3 and quantity sold q₁=127. Imagine that a demand shock shifts the market to a new equilibrium with price p₂= $8 and quantity sold q₂ = 182. What is the price elasticity of supply here? Round your answer to one decimal place (eg.. 2.14 rounds down to 2.1 and 2.15 rounds up to 2.2). Your answer should be a positive number.
The semiconductor chip shortage is limiting the production of new cars (decrease in supply). At the same time, fewer cars are being traded-in for upgrades(decrease in demand). How will this affect the equilibrium price and equilibrium quantity in the used car market? O The equilibrium price increases, but the equilibrium quantity of used cars decreases. The equilibrium price increases, but the equilibrium quantity cannot be determined. O The equilibrium price decreases, but the equilibrium quantity of used cars increases. O The equilibrium quantity of used cars decreases, but the price cannot be determined.
answer the following questions based on the graph for microeconomics.
Money Supply Money Demand Interest Rate $ 600 $ 800 2% $ 600 700 3 $ 600 600 4 $ 600 500 5 $ 600 400 6 Investment (at Interest Rate Shown) $ 90 80 70 50 40 Answer the question based on the information in the table. The amount of investment that will be forthcoming in this economy at equilibrium is Multiple Choice $70. $90. $50. $80.
Sugar prices in the United States are several times higher than the world price of sugar. This disparity results from a federal government program that keeps enough foreign-produced sugar out of the United States to hold U.S. sugar prices at a high level. The program raises the price of all sweetened foods produced in the United States; it boosts food costs for the average household by more than a hundred dollars per year. Who benefits from the program? Why do you suppose it exists?
The demand for money in the economy sometimes for the motive of transactions, speculation, and precaution. The macroeconomic balance in the presence of money is shown by the curve following. A. How do you read and understand the following curve? B. The relationship between the demand for money for transactions and the demand money for this speculation why the angle is 45°? In graph explain what happens when there are: A. monetary contraction! B. monetary expansion!
The concept time value of money indicates Multiple Choice the value of a dollar decreases over time as prices increase. monetary systems tend to become more sophisticated over time. a dollar received today is worth more than a dollar received a year from today. the prices of goods and services will fluctuate over time due to inflation and higher costs of production.
“Suppose that you have been given a summer job at J limited, a company that manufactures sophisticated radar sets for commercial aircraft. The company, which is privately owned, has approached a bank for a loan to help finance its tremendous growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs: The cost of the memory chips used in a radar set. Factory heating costs. Factory equipment maintenance costs. Training costs for new administrative employees. The cost of the solder that is used in assembling the radar sets. The travel costs of the company’s salespersons. Wages and salaries of factory security personnel. The cost of air-conditioning executive offices. Wages and salaries in the department that handles billing customers. Depreciation on the equipment in the fitness room used by factory workers. Telephone expenses incurred by factory management.…
Economy Consider again the economy from the last question, where inflation is currently 4 percent and the government would rather it be at 1 percent. If this economy decides to spread out the loss of GDP evenly over ten years, each year it will have to give up ___________ percent of its GDP. Carefully follow all numeric instructions. Be sure to enter your answer "as a percent, but without the percentage sign." If 99.99 percent of each year's GDP must be given up, put 99.99 in the blank.
how is the price of Fertilizer determined? we know that the price of a good is formed from the interaction of supply and demand. Producers will not sell a good below the cost of production. Demand changes the price due to competition; more demand drives the price up, less demand brings the price down. when you discuss how the price is determined: Taxes: is the good taxed? (e.g. cigarettes have a high tax) Costs of production: (resources, labor, etc.) Transportation Competition: is the good in high demand? Give a summary of the factors that go into the price of the good. (asked before but want better answer)

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