Question: In the IS-LM model an increase in . . increases the demand for .. by . . the .......... .......... interest rate which increases. ........... the money supply/goods and services / lowering / consumption. O a. b. taxes / goods and services /increasing /consumption. O government spending/goods and services / increasing/consumption. O d the money supply / goods and services / lowering / investment. O e. the money supply/investment goods / increasing / investment.

Question: In the IS-LM model an increase in . . increases the demand for .. by . . the .......... .......... interest rate which increases. ........... the money supply/goods and services / lowering / consumption. O a. b. taxes / goods and services /increasing /consumption. O government spending/goods and services / increasing/consumption. O d the money supply / goods and services / lowering / investment. O e. the money supply/investment goods / increasing / investment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Interest rate (percent per year) MS XA MD₁ 2 0 3.0 3.1 3.2 3.3 3.4 3.5 Real money (trillions of 2009 dollars) The figure above illustrates the effect of O a decrease in real GDP. an increase in real GDP. an increase in the monetary base. MDO a decrease in the monetary base.
10- Assume that the economy starts at an equilibrium output Y*,and interest rate i*. Suggest a policy mix to achieve the following objectives. a) Increase Y while keeping i constant. b) Decrease fiscal deficit while keeping Y constant. c) Government wants to decrease the interest rate while keeping Y constant.
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25.Foraign exchange dealers expect the Canadian dollar next year to depreciate against all currencies. What is the effect on the quantity of real GDP demanded or aggregate demand in Canada? A. There is no change to either the quantity of real GDP demanded or to aggregate demand. В. Canadian aggregate demand increases. С. Canadian aggregate demand decreases. D. The quantity of Canadian real GDP demanded decreases. E. The quantity of Canadian real GDP demanded increases.
According to new classical economists, A a change in the money supply will affect real GDP only if people anticipate the policy change. B C D fiscal policy has more chance of success than monetary policy. using monetary policy will change real GDP only if the policy takes people by surprise. monetary policy can never change real GDP.
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(in trillions) anupuedgejetoally $35 $30 $25 $20 $15 $10 $5 $5 $10 $15 $20 $25 45° Line AE $30 $35 Real GDP (in trillions) The central bank has recently conducted monetary policy that substantially reduces the real interest rate. As a result, autonomous spending increases by $5 trillion. Examine the effects of this reduction in the real interest rate by identifying (1) the amount of autonomous spending before the real interest rate falls, (2) the amount of induced spending before the real interest rate falls, (3) the level of equilibrium Real GDP before the real interest rate falls, (4) the value of the spending multiplier, (5) the level of equilibrium Real GDP after the real interest rate falls, and (6) the amount of induced spending after the real interest rate falls.
Are the following statements True, False or Uncertain? Justify you answer for each of the statements. If the government increases both Tax and Expenditure by equal amount, then there will be no increase in income in the Keynesian model. If money demand does not depend on interest, them LM curve is vertical.
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When the economy id experiencing a recessionary gap, how can expansionary monetary policy affect real output and the price level? An expansionary monetary policy can result in decreased real output and an increased price level. An expansionary monetary policy can result in increased real output and a lower price level. An expansionary monetary policy can result in decreased real output and a lower price level. An expansionary monetary policy can result in increased real output and an increased price level.