What happens to the real interest rate

Assignment Help Econometrics
Reference no: EM131142002

Suppose output is initially equal to potential GDP. Now assume the government cuts taxes (and assume government expenditures remain unchanged). How does this affect the ADI curve? What happens in the short run to equilibrium output? To unemployment? Over time, will inflation tend to rise or to fall? Explain how the adjustment of inflation works to return the output gap to zero. What happens to the real interest rate?

Reference no: EM131142002

Questions Cloud

What are the consequences for the output gap in the long run : What are the consequences for the output gap in the long run?
Calculate the firm''s after-tax return on equity roe : Calculate the firm's after-tax return on equity (ROE) and earnings per share EPS) If the firm retires $4 million of preferred stock using the proceeds from an equal increase in long-term debt, what would have been the after-tax ROE and EPS? If the fi..
What happens in the short run to equilibrium output : Explain how the adjustment of inflation works to return the output gap to zero. What happens to the real interest rate?
What is your process for assessing the risks : How will you manage the group? What is your process for assessing the risks? What techniques will you use? Where will you start?
What happens to the real interest rate : Explain how the adjustment of inflation works to return the output gap to zero. What happens to the real interest rate?
How does technology improve individuals identity management : How has technology increased contact among people who are similar? How has technology increased contact among people who are different? How does technology strengthen communication within diasporic groups?
What is mcfrugal degree of operating leverage at a sales : McFrugal, Inc. has expected sales of $20 million. Fixed operating costs are $2.5 million, and the variable cost ratio is 65 percent. Mcfrugal has outstanding a $12 million, 8 percent bank loan. The firm also has outstanding 1 million shares of common..
Find the sending-end voltage and voltage regulation : Find the sending-end voltage, voltage regulation, sending-end power, and transmission line and effciency when the line is supplying a three-phase load.

Reviews

Write a Review

Econometrics Questions & Answers

  What is the natural rate of unemployment

Suppose that the markup of prices over costs increases to 10%. What happens to the natural rate of unemployment? Explain the logic behind your answer.

  Personality theories focus on person variables

Discuss why Skinner studied overt behavior and rejected studying internal processes as determinants of behavior.

  Casper consumes cocoa and cheese cocoa is sold in an

casper consumes cocoa and cheese. cocoa is sold in an unusual way. there is only one supplier and the more cocoa you

  What bundle of goods will maximize the utility

A consumer enjoys two goods, X and Y. The price of X is $5 and the price of Y is $10 and the consumer has $1500 to spend on these goods. The utility function of the consumer is U = Y √x ; thus MUx = 1/2 Y/ √x and MUy = √x . What bundle of goods wi..

  What is total number of workers that will be added to city a

Newton exports all their products outside the city and Garfield only sells their products within the city. Newton experiences growth, so it hires 100 more workers, all of whom come to reside in city A.

  Develop the equations for total cost and total revenue

A small company manufactures a certain product. Variable costs are $20 per unit and fixed costs are $10,875. The price-demand relationship for this product is P= -0.25D + 250, where P is the unit sales price of the product and D is the annual dema..

  How much can alvin spend on the computer

Alvin wants tostart college and have $12,000 available to buy a used car  when he graduates in 4 years. Alvin wants to buy a new computer, software, and peripherals now, and he earns nominal interest rate 3% compounded yearly.

  Determine the atcf for each year after tax pw and aw

Agrigrow is to purchase a tractor for over-the-road hauling for $90,000. It is expected to be of use to the company for 6 years, after which it has a salvage value for $4,000. Transportation cost savings are expected to be $63,000 per year, includ..

  What is profit or loss by an economists definitions

Economan has been infected by the free enterprise bug. He sets up a firm on extraterrestrial affairs. The rent of the building is $4,000, the cost of the two secretaries is $40,000, and the cost of electricity and gas comes to $5,000.

  Determine what should the values of p and x be

suppose two types of consumers exist, a more affluent group (1) with an estimated price elasticity for biscuits of -2 and a less affluent (2) with an estimated price elasticity for biscuits of -2.5. Pillsbury puts a posted price of a particular amoun..

  What is the unit price at this oint of optimal demand

What is the unit price at this oint of optimal demand?

  What are the accounting profit and economic profit for each

During a particular year, a consulting firm has the following costs: 575,000 in wages and salaries to employees; 70,000 in rental payments; and 27,000 for office supplies, utilities and advertising. In Addition Janis the owner of the firm is full ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd