QUESTION 5Which of the following is true?All else equal, if government spending and tax revenue INCREASE by the SAME amount in a closed economy,where the marginal propensity to consume is less that 1, then the equilibrium real interest rate will increase.O Job polarization refers to the disappearance of low-skill jobs.None of the other answers is correct.All else equal, an increase in the currency-deposit ratio will cause an increase in the money supply.

Correct : All else equal, if government spending and tax revenue INCREASE by the same amount in a…

Answered: Which of the following is true? All…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Contractionary monetary policy would ______ interest rates and _______ the U.S. dollar, leading to a(an) ________ in U.S. net exports. increase, appreciate, decrease. increase, depreciate, decrease. decrease, appreciate, increase. decrease, depreciate, increase.
Suppose that the Fed pursues an expansionary monetary policy by pushing real interest rates down, other things constant. Assume the policy is unanticipated: a We should expect real investment spending to rise b We should expect real consumption spending on durables to fall c We should expect stock prices to fall d We should expect the U.S. dollar exchange rate to appreciate
Hello please help. I know for sure that answer " more; left" is wrong
When the central bank sells securities in the open market, which of the following sets of actions will happen? Group of answer choices Increase in interest rates, increase in budget deficit, and a trade surplus The money supply will increase, nominal interest rates will fall, increase in aggregate demand The money supply will decrease, nominal interest rates will increase, decrease in aggregate demand The money supply will increase, nominal interest rates will fall, decrease in aggregate demand
We make use of the general monetary model here, where L is no longer assumed constant, and money demand is inversely related to the nominal interest rate. Recall from that earlier question inflation rate in Korea is = 10% and inflation rate in Japan is = 0%. In addition, assume that the bank deposits in Japan pay 2% interest rate (i¥ = 2%). a. Compute the interest rate paid on South Korean won deposits (iwon). b. Using the definition of the real interest rate, show that the real interest rate in South Korea (rwon) is equal to the real interest rate in Japan (r¥) c. Suppose the Bank of Korea decreases the money growth rate from 15% to 10% and the inflation rate falls proportionately (one for one) with this decrease. If the nominal interest rate in Japan remains unchanged, what happens to the interest rate paid on Korean won deposits? d. Using time series diagrams (impulse graphs), illustrate how this decrease in the money growth rate affects South…
Assume that the government decreases its spending on discretionary budget programs. All else constant, how will the change in national income affect U.S. demand for imported goods and thus the value of the dollar? Demand for imports will be unchanged; the dollar will appreciate. Demand for imports will decrease; the dollar will depreciate. Demand for imports will decrease; the dollar will appreciate. Demand for imports will increase; the dollar will depreciate. Demand for imports will increase; the dollar will appreciate.
Robust economy growth ships the transactions demand for money. Consequently, growth will tend to either raise our interest rate or decrease those rates. Please see which direction the rates move, and explain why
Actual GDP in a country is estimated to be 10 percent below potential GDP. Prices are virtually unchanged from one year ago. Unemployment is 12 percent of the civilian work force, much higher than it has been in many years. Which of the following policies (whether monetary or fiscal) would be appropriate for improving these economic conditions? (select as many as apply) increases in reserve requirements on deposits at commercial banks to protect depositors decreases in interest rates by the central bank lower corporate and personal income taxes reductions in the federal debt
Robust economic growth shifts the transactions demand for money. Consequently, growth will tend to either raise our interest rates or decrease those rates. Please say which direction the rates move, and explain why?
If M stands for money supply, R for interest rate, E number of units of domestic currency per unit of foreign currency, Ee expected future value of E, a permanent increase in the money supply leads to the following sequence in the short run: A) M up, R up, Ee down, E up (domestic currency depreciates). B) M up, R up, Ee down, E down (domestic currency appreciates). C) M up, R up, Ee up, E up (domestic currency depreciates D) M up, R down, Ee up, E up (domestic currency depreciates) E) M up, R down, E up (domestic currency depreciates)
Suppose the economy is experiencing a recession. If the Federal Reserve enacts expansionary monetary policy, interest rates will likely Multiple Choice fall causing short-run real GDP to increase. rise causing short-run real GDP to decrease. fall causing short-run real GDP to decrease. rise causing short-run real GDP to increase.
while expansionary fiscal Expansionary monetary policy would likely cause increases in policy financed through increased borrowing would result in decreases in OC and I; (X-M) only OC and (X-M); C only OG only; C and I OC, I, and (X-M); C, I, and (X-M) Conly; I only

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