Which of the following is a position held by monetarists? O Aggregate demand depends on the money supply and on velocity. The short-run aggregate supply curve is horizontal. The economy is unstable; wages and prices are inflexible. PRICE LEVEL O The velocity of money is constant. Initially, the economy is in long-term equilibrium. Suppose there is decrease in velocity-that is, there is a decrease in the average number of times a dollar is spent to buy goods and services. Show the long-run effect of this change according to the monetarist view, ceteris paribus, by dragging one or both curves on the graph below. REAL GDP SRAS AD 24 AD SRAS

Which of the following is a position held by monetarists? O Aggregate demand depends on the money supply and on velocity. The short-run aggregate supply curve is horizontal. The economy is unstable; wages and prices are inflexible. PRICE LEVEL O The velocity of money is constant. Initially, the economy is in long-term equilibrium. Suppose there is decrease in velocity-that is, there is a decrease in the average number of times a dollar is spent to buy goods and services. Show the long-run effect of this change according to the monetarist view, ceteris paribus, by dragging one or both curves on the graph below. REAL GDP SRAS AD 24 AD SRAS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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a) Which of the follwing monetary policy actions can be used to close an inflationary gap?O No change in the money supply to keep interest rates constant.ODecrease the money supply to decrease interest rates,OIncrease the money supply to increase interest rates.O Increase the money supply to decrease interest rates.O Decrease the money supply to increase interest rates. b) Assume the economy is initially at full-employment equilibrium. Suppose the economy slows down and uncertainty increases, reducing consumption and investment expenditures, in the short run, this shock willcause the economy to fall below full enployment. To move the economy to a full-employment equilibrium, the Fed could:O. decrease government spendingO. increase corporate tax ratesO. lower the federal fund rate targetO. increase government spending O. raise interest rates
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es Suppose a firm is currently producing 900 computers per week and charging a price of $1,200 per computer. a. Demonstrate how the firm will respond to a negative demand shock. Assume prices are flexible. Instructions: Use the tool provided, 'S Flexible Prices', to draw the supply curve when prices are flexible. Then use the tool provided, 'D Negative Shock', to illustrate the shift in the aggregate demand curve when there is a negative demand shock. Computer Market Price $1,200 900 Computers per week Demand Tools S Flexible Pric D Negative Sh O
What do you expect will happen to the price level and real GDP in the short run when the bank of Canada buys domestic government bonds given a positively sloped SRAS curve? Select one: O a. Both the price level and real GDP will cross out increase. O b. Both the price level and real GDP will decrease. cross out O c. The price level will increase while real GDP cross out will decrease. O d. The price level will decrease while real GDP cross out will increase. O e. There is no change either to the price level or cross out the real GDP
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Please answer the following in 5 minutes I’m trying to study.