What to recommend for macroeconomic policy makers in us

Assignment Help International Economics
Reference no: EM13234908

The U.S. economy is in a recession and the IS-LM suggests we are in a liquidity trap.

a) Illustrate the situation using the AD-AS and IS-LM diagrams.

b) Explain what a liquidity trap.

c) If the there is no monetary or fiscal policy change what does the price adjustment mechanism predict?

d) Why might this be un-desirable?

e) What would you recommend for macroeconomic policy makers in the U.S. Show the impacts graphically? What would be the downside to your recommended policy(ies)?

Reference no: EM13234908

Questions Cloud

How does a debt-financed tax cut affect public saving : 1. Why do so many economists project increasing budget deficits and government debt over the next several decades 2. According to the Ricardian view of government debt,
How much was the growth rate of real gdp per capita : Suppose the real GDP of a country increased from 2,000 billion to 2,100 billion in one year. In the same year, population growth rate was 3%. How much was the growth rate of real GDP per capita in that year
Define integrated marketing communications : Regarding "Make Your Dealers Your Partners," why do you think the Caterpillar system works? Identify characteristics that seem to be unique to Caterpillar and make their system successful. Explain how these unique characteristics contribute to the..
Calculate the opportunity cost for chris and andrew : calculate the opportunity cost for chris, andrew and stuart if they have to opt between travelling by bus, at 3 hours for $20 OR PLANE FOR $100 IN 30 MINUTES, onsidering that each earn $12, $5 and $10 an hour
What to recommend for macroeconomic policy makers in us : The U.S. economy is in a recession and the IS-LM suggests we are in a liquidity trap. a) Illustrate the situation using the AD-AS and IS-LM diagrams. b) Explain what a liquidity trap.
How does multiple-player system relates to the changes : How does multiple-player system relates to the changes on health care?
Describe the supply chain necessary for a tailgate : Describe the supply chain necessary for a tailgate for 20 friends before a big game.
Define desire for holding currency and the money multiplier : In Westlandia, the public holds 50% of M1 in the form of currency, and the required reserve ratio is 20%. Estimate how much the money supply will increase in response to a new cash deposit of $500 by completing the accompanying table
What are control and what are containers : What are the various component use to build Graphic User Interface(GUI) screen? What are control and what are containers

Reviews

Write a Review

 

International Economics Questions & Answers

  Asymmetric information exchange

In the value process, the estimation of the has historically been somewhat neglected in relation to the other steps in the process.

  What is the impact of a drop in exports on us gdp

If the European slump also leads to a slowdown of the other economies that import goods from the United States, the effect could be larger. Assume that US exports decrease by 5% (as a result of changes in foreign output) in one year. What is the ..

  Why we should go back to the gold standard

The United States and most other countries abandoned the gold standard during the 1930s. Why would the 1930s have been a particularly difficult time for countries to remain on the gold standard Do you agree or disagree with Congressman Ron Paul ..

  How to bring the economy back to full-unemployment

The unemployment rate is the US fluctuated around 6% in 2002-2003 . Assume the full- unemployment rate is 5%  What could the Fed do in 2002-2003 in order to bring the economy back to full-unemployment What did the Fed actually do

  Prepare a short research paper

Prepare a short research paper on one of the topics as Trade Policy and exchange Rate Policy

  Which country would you expect to face capital inflows

Suppose that the U.S. dollar-pound sterling spot exchange rate equals $1.60/£, while the expected future rate is $1.64/£. The yield on a one-year U.S. Treasury bill is 9% and on a one-year U.K. Treasury bill the yield is 8%.

  How a company could benefit from either centralization

Evaluate and compare the "vertical restraints" of the two industries / sectors for the purposes of assessing the consequences of these provisions for strategic decision making.

  Describe the long-term productivity in the united states

Terrorist attacks foster instability and may affect productivity over the short and long term. Do you think the September 11, 2001, terrorist attacks on the World Trade Center and the Pentagon affected short- and/or long-term productivity in the U..

  Characterize the non-alcoholic beverage industry in the us

As a research analyst for PepsiCo (parent corporation for brands including Pepsi, Tropicana, Mountain Dew, Aquafina and more), you have been asked to assess the size of the global soft drink manufacturing industry. Specifically, you need to determ..

  Calculate the value of call option on the pound

Suppose that the spot value of the British pound is $1.55, the annualized thirty day sterling interest rate is 10 percent, the annualized 30-day U.S. interest rate is 8.5 percent,

  Determine the effects on the exchange rate

Using demand and supply analysis to assist you, determine the effects on the exchange rate between the British pound and the Japanese yen from:

  What is the change in producer surplus due to the subsidy

Do you expect Tradia to export more with the subsidy and what is the change in consumer surplus due to the subsidy

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