Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Suppose that natural real GDP is constant. For every 1 percent increase in the rate of inflation above its expected level, firms are willing to increase real GDP by 2 percent. The output ratio is initially 100 and the inflation rate equals 2 percent.
a) Based upon the preceding information, draw the short-run Phillips Curve.
b) What is the growth rate of nominal GDP in the economy?An adverse supply shock raises the inflation rate associated with every output ratio by 3 percentage points.
c) Draw the new short-run Phillips Curve.
d) The government chooses to follow a neutral policy in response to this shock. What will be the growth rate of nominal GDP? What will be the new rate of inflation? What will be the output ratio?
e) If the government chose to follow an accommodating policy, what would be the new inflation rate? The output ratio? The growth rate of nominal GDP?
f) If the government chose to follow an extinguishing policy, what would be the new inflation rate? The output ratio? The growth rate of nominal GDP?
Problem - Income Elasticity of Demand, Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5
Find the following: First solve this problem using an Excel spreadsheet approach and then do the problem using the optimization procedure; compare the answers for the two methods.
Explain how a change in investment can have big impact on GDp causing nationwide slump. Recall that investment is "small' relative to the whole economy.
Calculate the price elasticity of demand for the product below using average values for the prices and quantities in your formula.
Suppose a risk-averse consumer has an initial wealth of $5,000 and a utility function U(M) √M.. He faces an 80 percent chance of losing $4000, and a 20 percent chance of losing $0.
Compute the monopoly equilibrium. Compute the consumer surplus. Assume this firm practices two-parts tariffs, Compute the optimal output.
What happens to the equilibrium price and quantity in each market? Which product experiences a larger change in quantity? Which product experiences a larger change in price?
Compute the producer surplus from parts a and b. Are producers better or worse off as a result of international trade? Discuss why.
What were some of causes of stagflation of 1973 and 1979? In what ways were these episodes of stagflation different from great depression of the 1930s?
In the country A, all wage contracts are indexed to inflation. That is, each month wages are adjusted to reflect increases in cost of living as reflected in changes in price level. Explain answer with aggregate supply and aggregate demand curves.
Throughout this course we have discussed the 'agency problem' - i.e., when the interests of owners and managers are not properly aligned.
What is the level of price, output, and amount of profit for an unregulated monopolist? Analyze the effect of regulation on the allocation of resources. Which situation is most efficient? Which situation is most likely to be chosen by government? ..
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd