4. An economy is described by the following equations:Y 4,000+2(MIP)ADSRASOkun's LawY= Y +100(P-P)(Y-YY=-2(u-u)In this economy full-employment output Ỹ equals 6,000 and the natural unemployment rate u equals 0.05.a. Suppose that the nominal money supply has long been constant at M 4,000 and is expected by the public to remain constant forever.What is the long-run equilibrium value of the price level (P)?What is the equilibrium value of the expected price level (P)?What is the long-run equilibrium value of output (Y)?What is the long-run equilibrium value of the unemployment rate (u)?b. A totally unexpected increase in the money supply occurs, raising it from 4,000 to 4,400.What is the short-run equilibrium value of the expected price level?What is the short-run equilibrium value of the price level?What is the short-run equilibrium value of output?What is the short-run equilibrium value of the unemployment rate?What is the value of cyclical unemployment?What is the value of unanticipated inflation?(Round your solution to two decimal places).(Round your solution to three decimal places).(Round your solution to three decimal places).% (Round your solution to two decimal places).What is the slope of the short-run Phillips curve in this economy?(Round your solution to two decimal places).

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4. An economy is described by the following equations: AD SRAS Okun's Law Y=4,000+2(MIP) Y=Y+100(P-P) (Y-Y YY =-2(u-u) In this economy full-employment output equals 6,000 and the natural unemployment rate u equals 0.05. a. Suppose that the nominal money supply has long been constant at M = 4,000 and is expected by the public to remain constant forever. What is the long-run equilibrium value of the price level (P)? What is the equilibrium value of the expected price level (P)? What is the long-run equilibrium value of output (Y)? What is the long-run equilibrium value of the unemployment rate (u)?

4. An economy is described by the following equations: AD SRAS Okun's Law Y=4,000+2(MIP) Y=Y+100(P-P) (Y-Y YY =-2(u-u) In this economy full-employment output equals 6,000 and the natural unemployment rate u equals 0.05. a. Suppose that the nominal money supply has long been constant at M = 4,000 and is expected by the public to remain constant forever. What is the long-run equilibrium value of the price level (P)? What is the equilibrium value of the expected price level (P)? What is the long-run equilibrium value of output (Y)? What is the long-run equilibrium value of the unemployment rate (u)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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