The following set of equations describe an economy: C = 14,400 + 0.5 (Y – T) – 40,000r Ip = 8,000 – 20,000r G = 7,800 NX = 1,800 T= 8,000 %3D Y* = 40,000 Suppose that the real interest rate (r) is 10%. Is the economy in long run equilibrium? If not, what real interest rate should central bank set to restore the economy back to the long run equilibrium? And what methods can central bank use to adjust the interest rate? (Round your answer to 2 decimal

Q: did you get 0.2Y?

A: The aggregate expenditure is the sum total of consumption, investment, government expenditures.

Q: hey i was doing my homework and i couldnt figure out the last question

A: Average total cost is the per unit cost incurred in producing a commodity.

Q: A thug wants the contents of a safe and is threatening the owner, the only person who knows the…

A: When talking about rollback game, it is the situation when the game is either a finite extensive…

Q: Use image

A: The spending function represents the relationship between household spending and total income. When…

Q: What is the matter economic

A: Discussing the "matter" of economics involves exploring its fundamental components and core…

Q: dccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccccc…

A: Your question is not visible.

Q: HOW TO DRAW A TABLE FORM

A: There are 4 possible ways in which the other player can act :- 1) always choose ‘C’ 2) He will…

Q: What are some mandates and compliance regulations that protect people's identity and privacy?

A: Concept Privacy refers to a person's ability to control when, how, and to what extent their personal…

Q: blanks

A:

Q: What is one pkus one

A: Step 1:One plus one equals two1+1 = 2 For example if you have one apple and you get one more apple ,…

Q: Could you answer parts D-F please?

A: Nash equilibrium given to us that: Q*1 = (0.5a - c1)/1.5b Q*2 = (0.5a - c2)/1.5b

Q: can u solve d and e

A: Unemployment is an expression alluding to people who are employable and effectively looking for a…

Q: I need help with 4 and 5

A: Since you have asked to answer parts (4) and (5), we are answering only that for you. A government…

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.