Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Question
Chapter 12, Problem 6E
(a)
To determine
The impact of decreased consumer confidence on the IS-MP diagram.
(b)
To determine
The impact of improved Information Technology on increased productivity.
(c)
To determine
The impact of increased import demand by booming economy.
(d)
To determine
The impact of increased imports in the economy.
(e)
To determine
The impact of earthquake in the economy.
(f)
To determine
The impact of housing bubble burst in the economy.
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Chapter 14, Problem 5, p. 530. (not answered)
In the New Keynesian model, how should the central bank change its target interest rate in response to each of the following shocks? Use diagrams and explain your results.
(a) There is a shift in money demand.
(b) Total factor productivity is expected to decrease in the future.
(c) Total factor productivity decreases in the present
Chapter 14, Problem 6, p. 530. (not answered)
In the New Keynesian model, suppose that in the short run the central bank cannot observe aggregate output or the shocks that hit the economy. However, the central bank would like to come as close as possible to economic efficiency. That is, ideally the central bank would like the output gap to be zero. Suppose initially that the economy is in equilibrium with a zero-output gap.
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Assume the Pakistan’s economy is in recession: Pakistan implements a combination of expansionary fiscal and monetary policy. In the absence of complete crowding out what will be the effect of these policies on each of the following:(i) Aggregate demand in Pakistan(ii) The price level in Pakistan(iii) Interest rates in Pakistan
Chapter 12 Solutions
Macroeconomics (Fourth Edition)
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