User Account

All Pages

Equilibrium quantity increases or decreases

Assignment Help Macroeconomics
Reference no: EM133377430

Two students are debating the effects of an expected decline in future home prices. Student 1 claims that a decline in home prices will increase the total quantity of homes bought and sold while student 2 claims that the quantity of homes bought and sold will decline.

a. Which student is correct? Without knowing the magnitude of the shifts, we cannot tell whether equilibrium quantity increases or decreases. No one is correct. Student 2 is correct. Student 1 is correct.

b. What do we know will happen without ambiguity? Equilibrium quantity will increase. Equilibrium price will decrease. Demand will increase once expectations are announced. Supply will decrease once expectations are announced.

c. On the graph, demonstrate one of the possible outcomes of an expected decline in future home prices. Assume equal shifts in curves.

Reference no: EM133377430

Questions Cloud

Discuss the concept of punctuated equilibrium theory : Discuss the concept of punctuated equilibrium theory as it pertains to changes in industries. Give an example of punctuated equilibrium theory in an industry
Do you think there is a solution to the problem : Do you think there is a solution to the problem the author describes? Why do you think that bitcoin's price and acceptance has still grown massively since 2013
What could cause a denial from an insurance company : What could cause a denial from an insurance company? Based on your readings in the textbook recommend a minimum of TWO suggestions for process improvement
Why is net profit important in business : Why is net profit important in business Why is revenue vs. profit important over time? How are Share Price, Profit, and Revenue-wise important compared
Equilibrium quantity increases or decreases : Which student is correct? Without knowing the magnitude of the shifts, we cannot tell whether equilibrium quantity increases or decreases
Why should you recommend bdo unibank : Why should you recommend BDO Unibank and If investors were to invest 1 million pesos on its stocks how much will they possibly gain
How does it connect to communities and social systems : Why do you think it is important for it for a social work "macro"? And how does it connect to communities and social systems and organizations?
How much can they claim as a medical deduction : expense deductions for the amount that exceeds 10% of a taxpayer's adjusted gross income. If their adjusted gross income is $101,598, how much can they claim
What did you learn from experience of group work : what did you learn from experience of group work why is that learning important to you? what value do you seefor the learning in your future career

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

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

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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