MACROECONOMICS FOR TODAY
10th Edition
ISBN: 9781337613057
Author: Tucker
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter P5, Problem 14KC
To determine
No impact of the policies of government either in short run or long run due to which policy.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Economics: Friedman argued that
inflation is caused by: a) Excessive
government spending b) Supply shocks
in the economy c) Increases in the money
supply that exceed the growth of real
output d) Wage and price rigidities
According to Friedman, what is the role
of government in education? a) To
provide universal access to education
Specific Subject: Macroeconomics - AD and AS Shocks
Analyse the case of a negative supply shock caused by an increase in oil prices and compare with the shock caused by the Covid pandemic and answer next questions:
Explain what would be the similarities and differences between the two shocks?
Graph and explain what would be the effect of an expansionary economic policy (increase in aggregate demand)?
Graph and explain what measures or government intervention would be most appropriate to deal with both types of shocks?
Graph and compare the adjustment in both cases with and without government intervention.
Please, I need just the answer of question N. 4. The others questions were answered by expert tutors already.
Topic: Unemployment and Inflation
Explain three types of unemployment, their meaning and examples
Knowledge Booster
Similar questions
- QUESTION 6 P (products price level) Short-run Aggregate Supply Keynesian range Classical or Modetarist range intermediate range AS Q (real GDP) 06. Which of the following statements are FALSE? O (a) In the horizontal (Keynesian) range of the AS curve Keynesian macroeconomic policy is very effective. (b) In the intermediate range Keynesian macroeconomic policy is less effective because its impact is partially dissipated by inflation. (c) In the vertical (Monetarist or Classical) range Keynesian policy is totally ineffective as an increase in Aggregate Demand produces only inflation. (d) The AS curve can become vertical only when the economy is operating beyond full employment.arrow_forwardQuestion: Evaluate the relationship between unemployment and inflation in the context of the Phillips Curve. Provide a detailed explanation of the Phillips Curve concept and how it demonstrates the trade-off between unemployment and inflation. Discuss the validity of this relationship in the short run versus the long run, citing historical economic examples. Also, explore how factors like expectations and supply shocks can influence this trade-off and potentially lead to scenarios like stagflation.arrow_forwardThe diagram opposite shows two short-run Phillips curves (PC0 and PC1). PC0 corresponds to a situation in which workers expect no inflation. (a) What is the natural rate of unemployment? (b) What is the expected rate of inflation if the Phillips curve is PC1? Suppose that the economy begins in long-run equilibrium with zero inflation and that the authorities adopt a policy of constant monetary growth because they wish to reduce unemployment below its existing level. (c) Identify the short-run effect on unemployment and inflation. Unemployment........................................................................................................................…arrow_forward
- Long run macroeconomic equilibrium occurs when a. aggregate demand equals short run aggregate supply. b. aggregate demand equals short run aggregate supply and they intersect at a point on the long run supply curve. c. structural and frictional unemployment equals zero. d. output is above potential GDP.arrow_forwardSpecific subject : Macroeconomics - Phillips Curve & Okun's Lawarrow_forwardAfter an unexpected ________ in the price of oil, the long-run adjustment decreases the price level and ________ the unemployment rate as they return to their original levels. Select one: a. increase; decreases b. decrease; increases c. increase; increases d. decrease; decreases Note:- Please refrain from offering handwritten solutions. Please ensure that your response maintains accuracy and quality to avoid receiving a downvote. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward
- 54. Which of the following would be described as the operational lag? a. The time required to know that there is a recession b. The time required to agree upon a policy remedy for a recession c. The time required to get a particular plan impiemented with the money getting into peoples' hands d. Both A and Barrow_forwardAssume the United States economy is in recession. (a) Explain the effect of the recession on: (i) short-run price level (ii) short-run output (iii) unemployment (b) If 78% of newly unemployed workers are optimistic that they can return to their jobs, what impact will that have on the macroeconomy? Explain. (c) Assume the United States implements a combination of expansionary fiscal and monetary policies. In the absence of complete crowding out, what will be the effect of these policies on each of the following? (i) Aggregate demand in the United States. Explain. (ii) The price level in the United States. Explain. (iii) Interest rates in the United States. Explain. (d) The US Government decides to enact $100 billion in fiscal stimulus. Assume that the marginal propensity to consume is 0.5. (i) What is the impact on GDP of $100 billion in government checks? (ii) What is the impact of GDP of $100 billion in government spending on infrastructure and purchases of agricultural…arrow_forwardQuestion:- Comment, on the likely outcome with sufficient arguments? a) Impact on aggregate demand of the economy if imports are greater than exports.b) Impact on aggregate demand if the GDP of trading partner is increasing at a faster rate than that of India.c) Inflation rate in the country has reached 6.73%.d) Impact on GDP when, Interest rates have come down in the countrye) Impact on balance of payment, when there is a huge demand of vaccines produced in India in South Africa.f) Inflation rate in India reaches negative 2% (-2%)g) The aggregate demand falls short of aggregate supply in the economyarrow_forward
- (c). Consider an economy that starts out in steady state when the central bank decides to make the inflation target more ambitious. Analyse the effects of a decrease in the inflation target from ? to ??. Explain the mechanisms behind the adjustment to the new steady state.arrow_forward“The more people at work, the higher their bills” The Phillips Curve shows the correlation between unemployment and inflation.” In the light of this statement,(a) Draw the short-run trade-off between inflation and unemployment. How might the Central Bank move the economy from one point on this curve to another? (b) Draw the long-run trade-off between inflation and unemployment. Explain how the short-run and long-run trade-offs are related. (c) Illustrate the effects of the following developments on both the short-run and long-run Phillips curves. Give the economic reasoning underlying your answers.1. A rise in the natural rate of unemployment.2. A decline in the price of imported oil.arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Survey of Economics (MindTap Course List)EconomicsISBN:9781305260948Author:Irvin B. TuckerPublisher:Cengage Learning
Survey of Economics (MindTap Course List)
Economics
ISBN:9781305260948
Author:Irvin B. Tucker
Publisher:Cengage Learning