What do researchers mean when they ask “Why does monetary policy have real effects on the economy?

(1). Consider the following macroeconomic model of Tropicana. Y = C +1+G. . C = 90 + 0.9Y... | = 900-900R... G = Go.... M (0.9Y-90OR) P. . ...(Income identity) .... (Consumption) . (Investment) . .(Government) .. (Money market Equilibrium) %3D %3D %3D | Y = aggregate real output, R = the interest rate, M = the money supply and P = the price level. Limit figures to one decimal place when answering the questions below except where many zeros are Y%3D %3D involved. (a)Tropicana has been described as a closed economy. What does this mean? Is this evident from the macroeconomic description of Tropicana? (b)Derive the expression for aggregate real output Y. (c)Briefly explain why the expression in part (b) is an aggregate demand equation (curve). (d)Find the equilibrium value for real output if money supply is $800, government spending is $1000, and the price level is unity (1). (e)Sketch the aggregate demand curve in part(b) for P = 1, 2, 3, 4, insert a full employment aggregate supply…

11. The U.S. economy slowed significantly in early 2008, and policy makers were extremely concerned about growth. To boost the economy, Congress passed several relief packages (the Economic Stimulus Act of Act of 2009) that combined would deliver about $700 2008 and the American Recovery and Reinvestment billion in government spending. Assume, for the sake of argument, that this spending was in the form of payments made directly to consumers. The objective was to boost the economy by increasing the disposable income of American consumers. a. Calculate the initial change in aggregate consumer spending as a consequence of this policy measure if MPC in the United States is 0.5. Then calculate the resulting change in real GDP arising from the $700 billion in payments. 76177 b. Illustrate the effect on real GDP with the use of a graph depicting the income-expenditure equilib- rium. Label the vertical axis “Planned aggregate spending, AE Planned" and the horizontal axis "Real GDP." Draw two…

12. What are the three primary measures used in macroeconomics to assess the performance of an economy? 1) 2) work and actively seeking work. The opportunity cost of ( of goods and services that could have been produced if the unemployed workers would have worked. ) provides an overall indicator of output or production in the economy _) is the state a person is in if he or she cannot get a job despite willing to ) is the production _) tracks the overall increase in the level of prices in the economy. Each 3) ( measure is important for tracking the short-run and long-run health of the economy and for creating macroeconomic models to address important policy questions.