The possibility of changing economic factors in short-run.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.

Economics Concept Introduction

Money supply:

Money supply is the total amount of cash and term deposits in an economy at a given period of time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Is it possible that money supply can be more than the money demand (this means that we can have too much money)?

How do you think changes for our economy will be impacted by an increase in the money supply?

Is the demand for money function stable over time?

Answer 2

Question

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.

Economics Concept Introduction

Money supply:

Money supply is the total amount of cash and term deposits in an economy at a given period of time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.

Economics Concept Introduction

Money supply:

Money supply is the total amount of cash and term deposits in an economy at a given period of time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.

Economics Concept Introduction

Money supply:

Money supply is the total amount of cash and term deposits in an economy at a given period of time.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.

Economics Concept Introduction

Money supply:

Money supply is the total amount of cash and term deposits in an economy at a given period of time.

Answer 6

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.

Economics Concept Introduction

Money supply:

Money supply is the total amount of cash and term deposits in an economy at a given period of time.

Answer 7

Chapter 31, Problem 1QFR

To determine

To explain:

The possibility of changing economic factors in short-run.

Answer 8

Expert Solution & Answer

Explanation of Solution

In short-run, real economic factors can be altered by increasing money supply. Money supply in short-run can be increased by printing money. As money is printed, it will lead to increase in money supply, thereby more funds will be available at lower interest rate. Lower interest rate enhances investment in the economy. Since investment is a part of aggregate demand, an increase in investment leads to increase in aggregate demand.

Therefore, seeing as a component of aggregate demand, when investment increase the aggregate demand increase which leads to reduce the unemployment in the economy with higher GDP and price levels in the short-run.