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What is the economic justifcation for the sticky infation assumption? What
role does this assumption play in the short-run model?
Sticky inflation refers to a situation when there is high and constant inflation rate in the economy along with stagnant growth. Such a situation is undesirable for the economy.
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- 37.6% R Give Up? O Hint ment Score: Resources Chec on 5 of 15 <. In 2013, Prussia's aggregate demand curve was determined by the equation M +0= 4%. A change in aggregate demand means that in 2014, Prussia's aggregate demand curve was determined by the equation M +6= 7%. Using this information, draw Prussia's old and new dynamic aggregate demand curves on the graph. Which of the factors could have resulted in the change in 14 aggregate demand seen between 2013 and 2014? 13 O an improvement in technology 12 11 an increase in imports 10 a decrease in oil prices 8. AD 2013 O higher consumer confidence 7. 5. -3 -2 -1 3. 6. 10 Real GDP growth rate F12 AD 2014 4. 6, 4. Inflation rateGiven the following demand and supply functions for the cobweb model, find theintertemporal equilibrium price and determine whether the equilibrium is stable.In an OLG model, which of the following statement about equilibrium is wrong: A. equilibrium occurs when money sold = money bought B. 1 money = v bananas If v is too large, then money is expensive, gen 1 wants to buy very few units of money. We do NOT reach an equilibrium. C. 1 money = v bananas If v is too small, then money is expensive, gen 1 wants to buy very few units of money. We do NOT reach an equilibrium.
- What are the limitations of Samuelson general equilibrium modelSa mework 3 7 nts As: MX References The Mu Mc Graw Hill Type here to search (po pa P Ge ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launch Url=https%253A%252F%252Flms. O II Tu We J Ba units C Sch ADVANCED ANALYSIS Assume that demand for a commodity is represented by the equation 1 P=100-3Qa Supply is represented by the equation P= -10 +3Qs) where Quand Qs are quantity demanded and quantity supplied, respectively, and Pis price. Instructions: Round your answer for price to 2 decimal places and enter your answer for quantity Using the equilibrium condition Qs = Qd solve the equations to determine equilibrium price and Equilibrium price = $ Equilibrium quantity = FSA FA < Prev Saved 05 ho 7 of 25 L H www P NexShow in a graph using AD-AS model the changes (if any) in price, output, AD, and AS brought by the intervention of Holiday Economics. Holiday Economics involves holiday manipulation by moving certain holidays occurring on midweek days to weekend days or to Mondays. This was meant to boost local tourism and benefit the economy as people are expected to travel and spend more in vacations during the long weekends.
- According to the "4-Quadrant Model" (4QM), which of the following statement is correct? O If there is a positive demand shock in the space market, the housing rent is going to increase in the short run, and will be lower than the current rent in the long run. If there is a positive demand shock in the space market, the housing price is going to decrease in the short run, and increase in the long run. If there is a positive demand shock in the asset market, the housing rent is going to decrease in the long run. O If there is a positive demand shock in the asset market, the housing price is going to decrease in the short run, and will be lower than the current price in the long run.Explain the dynamic effect by taking "Oil Prices and Inflation" as an example?Explain the concept of excess demand in macroeconomics. Also, explain the role of open market operation in correcting it. (Kinly explain with diagram)
