Use the IS-LM model to analyze the short run impact of a fall in consumer confidence on the economy. You must provide a complete discussion of the impact including how the shock transmits through the economy & illustrate the impact on a diagram. The discussion must explain how consumers and producers respond in the economy; this means an intuitive discussion must be provided [see lecture for example].
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- 1. What is a market-clearing model? When is it appropriate to assume that market clear? 2. Use the model of supply and demand to explain how fall in the price of frozen yogurt would affect the price of ice cream and the quantity of ice cream sold. In your explanation, identify the exogenous and endogenous variables. 3. Consider an economy that produces and consumes hot dogs and hamburgers. In the following table are data for two different years. Goods Hot dogs Hamburgers Quantity (2010) 200 200 Price (2010) $2 $3 Quantity (2020) 250 250 Price (2020) $4 $4 Using 2010 data as the base year Compute the following statistics for each year. Nominal GDP, Real GDP, GDP Deflator, Inflation rate using GDP deflator, CPI, Inflation rate using CPI. (Hint: i) to calculate CPI use base year fixed quantity Hot dogs 200 and Hamburgers 200, ii) To calculate inflation rate, use percentage change in price level between two years.)Explain how does adecrease in the current income y affect the consumer’s consumption-saving decision. In particular,explain: 1) How will current consumption c, future consumption c', and savings s change; 2) Arethere any substitution effect or income effect. Make sure you draw two figures, one for the borrowersand one for the lenders.Q5. Hi can you please help me awnser the attached question?
- There are several factors that have influenced the importance of purchasing andsupply”. Justify this statement by discussing information technology as a major factor.Provide an example of your choice to explain the factor.1. Positive feedback loops 1. Consider two variables: X and Y. True or False: A positive feedback loop arises when X increases Y, and Y decreases X. A. True B. False 2. Consider the following scenario: You deposit an initial balance into an interest-bearing savings account. This cash deposit results in an interest payment credited to that account, further growing the account balance. This interaction between the size of the interest payments and overall amount of funds in your account A. is B. is not an example of a positive feedback loop.Consider the following extract and then answers the questions that follow: How SA's recession is impacting consumer spending Consumers are actively doing pre‐shopping research either through broadsheets or online, and comparing retailers’ offerings to seek out the best value before even leaving the house. Consumers simply no longer purchase certain items, pointing to their extreme need for frugality in current market conditions. Added to this, consumers have also changed the way they use these products in their homes to maximise usage and minimise wastage. This includes the alternative use of products, like using margarine in place of cooking oil and fragranced body lotion instead of perfume. Q1. Discuss the impact of the economy on consumer behaviour.Note: it is important that you consider using examples that is relevant and specific to the scenario provided when responding to this question. Q2. Finding cheaper prices online is one driver for online shopping. Describe any four other…
- Let's assume that prices substantially increased over the past year. How do you expect this will affect people's buying behavior? Be sure to tie this back to economic concepts discussed in this course. Time Atten 33 M.If we examine the effects of an iPhone price change on the quantity sold "holding everything else constant", what is this an example of? correlation versus causation O the ceteris paribus assumption O empirical analysis fallacy of compositionExplain the relationship that economic variables can have with businesscycles. These have both direction and timing. Give an example economicvariable of each combination of direction timing. Of these two attributes, ifyou had exclusive access to a reliable variable, which relationships wouldyou want this variable to have for forecasting purposes
- Suppose that both groups of students are on the right track, and each of the events described above arepartially responsible for the decrease in the price of pizzas. Based on your analysis of the explanationsoffered by the two groups of students, how would you determine which of the possible causes was thedominant cause of the decrease in the price of pizza? 1. Whichever change occured first must have beenthe primary cause of the change in the price of pizzas 2. If the equilibrium quantity of pizzas increases,then the demand shift in the market for pizzas must have been larger than the supply shift. 3. if theequilibrium quantity of pizzas increase, then the supply shift in the market for pizzas must have beenlarger than the demand shift. 4. If the price decrease was large, then the supply shift in the martket forpizzas must have been larger than the demand shiftPlease please help me asnswer it correctly and fastly The global oil market has been affected in the recent years by many factors that induces the global price to fall. This consequence is vital for the budget of the oil dependent countries. After the huge decrease on oil price in 2016, many traders and analysts believe that oil markets are still not immune to many problems and the oil price will tend to fall again. The main factor and problems toward a fall of the oil price started in 2015 but considering that people and oil companies do not tend to react immediately to the change of oil price, the total consumption and production of oil did not get any surprised changes in the short- run. The main factor that caused the drop on the oil price is the OPEC failure. The member countries of OPEC did not agree to stabilize the oil markets, since the organization decided against cutting production at a 2014 meeting in Vienna. It is estimated that if OPEC does not cut production, the…7. We ran a Vector-autoregresive model with two variables: with dtrade (change in trade balance), doilpr (change in oilpr) with one-lag and the result is as follows: dtrade 1st Lag of Trade Balance 1st Lag of Oil Price doilpr 1st Lag of Trade Balance 1st Lag of Oil Price Coef 0.48 275 0.04 1291 0.02 2939 0.35 7591 Std. Err 0.04 2789 0.02 1304 0.09 2198 0.04 5904 Z- statistic 11. 28 1.9 4 0.2 5 7.7 9 P>| zl 0 0.0 53 0.8 04 0 a) What can you infer from the result? b) Can you say anything about the long-run equilibrium value for change in trade- balance given the result?