1- In the monetary intertemporal model seen in class, explain and illustrate graphically how decreases in z and z' affect the economy using output supply and demand, labour supply and demand and money supply and demand. (Assume that the direct effect of a decrease in z on the supply of goods is larger that the anticipated decrease in future TFP, z'). 2- Explain the effects on real interest rate, wages, aggregate output, prices, employment, consumption, and investment 3- Suppose that the government decides to print money to finance a lump sum transfer of money to the representative consumer. Explain and illustrate graphically what would happen in the goods market, output market and money market as a result of this one-time printing of money.
1- In the monetary intertemporal model seen in class, explain and illustrate graphically how decreases in z and z' affect the economy using output supply and demand, labour supply and demand and money supply and demand. (Assume that the direct effect of a decrease in z on the supply of goods is larger that the anticipated decrease in future TFP, z'). 2- Explain the effects on real interest rate, wages, aggregate output, prices, employment, consumption, and investment 3- Suppose that the government decides to print money to finance a lump sum transfer of money to the representative consumer. Explain and illustrate graphically what would happen in the goods market, output market and money market as a result of this one-time printing of money.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter14: Valuation: Market-based Approach
Section: Chapter Questions
Problem 8QE
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