According to Friedman, in which of the following situations is the economy in long-run equilibrium?   a.  The expected economic growth rate is 3 percent and the actual inflation rate is 3 percent.     b.  The average inflation rate over the past five years is 2 percent and the expected inflation rate is 2 percent.     c.  The expected inflation rate is 3 percent and the actual inflation rate is 3 percent.     d.  The expected economic growth rate is 2 percent and the expected inflation rate is 2 percent.

The Fed is fighting recession and it happens to overstimulate the economy. If the expected inflation rate rises above the 2 percent goal, what is the cost of returning the inflation rate back to its goal?   The cost of returning the inflation rate back to its goal is _______.     A. an inflationary gap and an even higher inflation rate than initially   B. unemployment below the natural unemployment rate   C. a decrease in potential GDP and aggregate supply   D. a recessionary gap and a higher unemployment rate

In this Decision Point you learned a little about inflation and inflation expectations. Apply what you learned from this decision point to the following questions. Erica makes $25 per hour. Erica receives a 1.9%1.9% raise and inflation is 2.5%2.5% what happens to her real wage? Her real wage: rises by 1.9%1.9% rises by 2.5%2.5% falls by 0.6%0.6%. does not change.

Assume that an economy is in long-run equilibrium. Assume that consumers wish to hold less money because they use credit cards more frequently to purchase goods and services than cash. a. Draw a correctly labeled graph of the money market and show the effect of the reduced holdings of money on the equilibrium nominal interest rate in the short run. b. Based on the change in the interest rate in part (a), what will happen to each of the following in the short run? i. Prices of previously issued bonds ii. The price level and real income. Explain. c. With a constant money supply, based on your answer to part b(ii), will the velocity of money increase, decrease, or remain the same, or is the change indeterminate? d. Assume the country's banking system has limited reserves. If the central bank wishes to reverse the change in the interest rate identified in part (a), what open market operation would it use? F

Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

b. Why do some people say that inflation is a tax? Who pays that tax? Who collects that tax? How does it work exactly? Does your answer depend on whether the world is best described by a general equilibrium (Classica economics) or disequilibrium (Keynesian)? c. Economists say that, in response to a wage rate increase, the overall labor supply may increase, decrease or remain unchained. Why aren't economists more certain about the consequences of something as simpl as a wage increase? d. The introduction of the ATM machine led to a period of price level increases. Why? Explain your answer intuitively. e. What is the "intertemporal labor substitution" effect (also known as the "Uber" effect)? Although you can use with a numerical example to illustrate your answer, make sure you explain it with words.

Suppose the inflation premium is 2 percent and the nominal interest rate is 1 percent. Instructions: in part a, enter your answer as a whole number. In part b, round your answer to 1 decimal place. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers a. What is the real interest rate? percent b. What is the real interest rate if the inflation premium is 3 percent while the nominal interest rate is 0.5 percent? percent

The.... real interest rate will be greater than the .... real interest rate when the .... rate of inflation is ...... than the .... rate of inflation a) actual / expected / ex-post / greater / ex-ante b) ex-post / ex-ante / actual / less / expected c) ex-post / ex-ante / actual / greater / expected d) actual / expected / ex-post / less / ex-ante e) actual / expected / ex-post / more severe / ex-ante

Inflation at lowest rate in 5 years Inflation rate (percent per year) In September, inflation in the United Kingdom fell to 1.1% a year, its lowest in 5 years. Analysts expected an inflation rate of 1.3% a year. 1.7- Source: The New York Times, October 13, 2009 With the unemployment rate at 8 percent and the natural unemployment rate at 6 percent, sketch the short-run Phillips curve and mark on your graph the point which shows the situation in September. Label the point A. 1.5- 1.3- The unemployment rate is 8 percent and the natural unemployment rate is 6 percent. 1.1- Draw a point that shows the unemployment rate and the inflation rate in September. Label it A. Draw a point that shows the natural unemployment rate and the expected inflation 0.9 rate. Label it B. 10 12 Unemployment rate (percent of labor force) Draw the short-run Phillips curve that is consistent with these data. Label it. >>> Draw only the objects specified in the question. Selected: Delete Clear none Next