IS curve: r = 30.30-0.0015Y LM curve: =Y - 500(r + n°) SRAS curve: Y = Y + 100(P – P°) The nominal money supply is M = 59, 400, expected inflation is = 0.10, and full employment output is Y = 20,000. a) If the economy begins in general equilibrium, what are the equilibrium values of the price level, output and the real interest rate? b) if the expected price level is the price level your found in part (a), what happens to the price level, output, and the real interest rate in the short run if there is an unanticipated decrease in the nominal money supply to 49281.25? - %3D

I need help with this question

Please explain whole parts on paper please!!

1. Imagine an economy, where the SRAS in terms of inflation is given by II=5+Y, where Y is output. Imagine that the long run AS curve is given by Y=2. (25 marks) a) Give the equation of the AD curve (you can take liberties), if we assume that initially, the economy is at its long-run equilibrium. Justify. b) Imagine that your chosen AD curve's intercept goes up by one unit due to an expansionary monetary policy. What will be the new final equilibrium after this change? Justify. c) What will be the equilibrium after two periods of adjustment? Justify. d) Assume that before all the changes in the economy, in the initial, long-run equilibrium, the interest rate was 4 percent. Give an IS and an LM curve that are compatible with this initial equilibrium. Justify. e) What are the IS and LM curves going to be at the very end of the adjustment process, i.e., in the new long run equilibrium? Justify.

Consider a closed economy, where wages are sticky in the short run. The consumption function is C = co+c₁(Y-T), where the marginal propensity to consume c₁ is equal to 0.8. Initially the economy is in equilibrium at Y = Y* and P = Pº, where Pe is the price level that was expected when agents agreed their fixed nominal wage contracts. The short-run aggregate supply curve (SRAS) is horizontal. Suddenly the government increases government spending G by $200. For the following questions, if you think a variable goes up by (say) $50, just enter 50 as your answer. If you think a variable goes down by $50, enter -50 as your answer. If you think a variable doesn't change at all, enter 0 as your answer. 10. By how much will output Y change in the short run? 11. By how much will consumption C change in the short run? 12. By how much will investment I change in the short run? 13. By how much will output Y change (compared to its initial level before the change in G) in the long run, after wage…

True or False: An increase in the price level will shift the LM curve to the right.

Assuming that GDP is fixed, fill in the missing values for Total Amount of Money Demanded Transactions demand = 1,050 Money Supply 1 (Ms1) = 2,850 Money Supply 2 (Ms2) = 2,250 Money Demanded for Total Amount of Rate of Interest Asset Purposes Money Demanded 18% 600 Number 16% 1,200 Number 14% 1,800 Number 12% 2,400 Number 10% 3,000 Number At money supply Ms1, the equilibrium interest rate is Number At money supply Ms2, the equilibrium interest rate is Number

3) i) What happens to the value of nominal interest rate in the economy when the Federal Reserve buys government securities? ii) What happens in the AD-AS model graph when the Federal Reserve buys government securities?

Suppose the U.S. economy is initially (year 2020) in both short-run and long-run equilibrium and it is described by following functions: AD function: Y=12-P SRAS function: Y=YN+P-Pe where the expected price is Pe=2 and the natural rate of output is YN=10. Then, an expansion in AD occurs in year 2021 such that the new AD function is: Y=14-P Compute the Real GDP growth rate from 2020 to 2021 if the economy is now in short-run equilibrium only. (Express your answer in percent omitting the symbol %. For example, for 2% enter 2)

Question 17 If the output gap is constant at minus 2 and the inflation rate has fallen from 6 percent to 5 percent, then next period's short-run aggregate supply curve might be TT= 5+2 (11-15) TT = 5-0.5 (13-15) TT = 4 +0.5 (13-15) TT = 5 +0.5 (13-15)