What causes the economy to move from its short-run equilibrium to its long-run equilibrium? The government increases taxes to curb aggregate demand. The government increases spending to increase aggregate demand. O Nominal wages, prices, and perceptions adjust downward to this new price level. O Nominal wages, prices, and perceptions adjust upward to this new price level. Which of the following is true according to the sticky-mage theory of aggregate supply as a result of the increase in the money supply? Check all that Nominal wages at the initial aquilibrium are equal to nominal wages at the new short-run equilibrium Nominal ages at the initial equilibrium are less than nominal wages at the new long-run aquilibrium. Real wages at the initial equilibrium are less than real wages at the new short-ruequilibrium Real wages at the initial equilibrium are equal to real wages at the new long-run equilibrium. Judging by the impact of the money supply on nominal and real wages, this analysis effects in the short run but is noutral in the long run. consistent with the proposition that money has real

What causes the economy to move from its short-run equilibrium to its long-run equilibrium? The government increases taxes to curb aggregate demand. The government increases spending to increase aggregate demand. O Nominal wages, prices, and perceptions adjust downward to this new price level. O Nominal wages, prices, and perceptions adjust upward to this new price level. Which of the following is true according to the sticky-mage theory of aggregate supply as a result of the increase in the money supply? Check all that Nominal wages at the initial aquilibrium are equal to nominal wages at the new short-run equilibrium Nominal ages at the initial equilibrium are less than nominal wages at the new long-run aquilibrium. Real wages at the initial equilibrium are less than real wages at the new short-ruequilibrium Real wages at the initial equilibrium are equal to real wages at the new long-run equilibrium. Judging by the impact of the money supply on nominal and real wages, this analysis effects in the short run but is noutral in the long run. consistent with the proposition that money has real

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 8 1 pts Let's say the Aggregate Demand is less than potential output. Our goal is to keep the short run curves in equilibrium with the long run curves. To fix this, you would O increase the required reserves and increase taxes O increase interest rates and increase taxes O decrease government spending and increase taxes O increase the money supply and increase government spending
With the inflation rate on the vertical axis and output on the horizontal axis, the long run aggregate supply curve O a. Is horizontal because of money illusion O b. Is upward-sloping because a higher inflation rate implies higher profits for the firms O c Is upward-sloping because of money illusion O d. Is vertical because Yp is independent of the inflation rate
Please no written by hand solution tle shifts the Central Bank rule to the right. O a. An increase in the Z factors O b. A decrease in the price level O c. An increase in government spending O d. A decrease in government spending
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Consider the short run and the long run and then choose the statement that is correct. O A. The real interest rate is independent of the inflation rate in the long run. B. The real interest rate is dependent on the price level in the long run. C. In the short run, money market equilibrium determines the price level. D. In the short run, other things remaining the same, a given percentage change in the quantity of money brings an equal percentage change in the price level.
Ceteris paribus, if the Fed was targeting the quantity of money supplied and money demand increased, the Fed would likely If the Fed was instead targeting interest rates and money demand increased, the Fed would likely O increase the money supply: decrease the money supply decrease the money supply: do nothing O increase the money supply: do nothing do nothing: increase the money supply do nothing: decrease the money supply
What are the immediate effects and the long-run effects if the Fed changes the quantity of money? If the Fed changes the quantity of money, the immediate effects are on and the long-run effects are on O A. the short-term nominal interest rate; the price level and the inflation rate B. the price level; the real interest rate and the inflation rate C. the inflation rate; the long-run nominal interest rate and the real interest rate D. the price level; the inflation rate
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In regard to monetary policies, nonactivists have various proposals. True or False: Some nonactivists believe in the Taylor rule, which suggests that the annual money-supply growth rate should be based on the growth rates of velocity and Real GDP to ensure that the price level does not fluctuate. O False O True Which of the following statements best explains the difference between the Taylor rule and the two other nonactivist rules (the constant-money growth rate rule and the predetermined-money growth rate rule)? O The Taylor rule does not take into account the stability of prices. O The Taylor rule suggests how much the money supply should grow. O The Taylor rule does not take into account the current state of the economy. O The Taylor rule is not a derivation of the equation of exchange.
Assume, in the 3rd quarter of 2018 in the U.S., the velocity of money was 3.08 and the M2 money supply was $1,050 million. The average prices in the economy was $1.44. Based on this, what was the real GDP of the U.S. in the 3rd quarter of 2018. O a. $2,750 million O b.$1,250 millon Oc. $2,000 million O d. 52.250 million
In the short run, what would be the result of an increase in the monetary base? Assume the reserve ratio is unchanged. O a. Demand for money decreases. Ob. Demand for money increases. O c. Quantity demanded of money decreases. O d. Price level decreases. O e. Nominal interest rate falls.
es Suppose a firm is currently producing 900 computers per week and charging a price of $1,200 per computer. a. Demonstrate how the firm will respond to a negative demand shock. Assume prices are flexible. Instructions: Use the tool provided, 'S Flexible Prices', to draw the supply curve when prices are flexible. Then use the tool provided, 'D Negative Shock', to illustrate the shift in the aggregate demand curve when there is a negative demand shock. Computer Market Price $1,200 900 Computers per week Demand Tools S Flexible Pric D Negative Sh O