How and why gdp is affected in the short run

Assignment Help Macroeconomics
Reference no: EM132118770

Question: Analyzing macroeconomic events with the IS curve (II): Consider the following changes in the macroeconomy. Show how to think about them using the IS curve, and explain how and why GDP is affected in the short run.

(a) The government offers a temporary investment tax credit: for each dollar of investment that firms undertake, they receive a credit that reduces the taxes they pay on corporate income.

(b) A booming economy in Europe this year leads to an unexpected increase in the demand by European consumers for U.S. goods.

(c) U.S. consumers develop an infatuation with all things made in New Zealand and sharply increase their imports from that country.

(d) A housing bubble bursts so that housing prices fall by 20% and new home sales drop sharply.

Reference no: EM132118770

Questions Cloud

What is the amount of each coupon payment : A bond has a par value of $1,000, a current yield of 6.25 percent, and semiannual interest payments. The bond quote is 100.8. What is the amount of each coupon?
What is the coupon rate : A 12-year, annual coupon bond is priced at $1,102.60. The bond has a $1,000 face value and a yield to maturity of 5.33 percent. What is the coupon rate?
What is the rate of return to an investor in the fund : What is the rate of return to an investor in the fund during the year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Explain ideologies of left-wing and right-wing terrorism : Explain the following typologies: state terrorism, state-sponsored terrorism, and state-enabled terrorism.
How and why gdp is affected in the short run : Analyzing macroeconomic events with the IS curve (II): Consider the following changes in the macroeconomy. Show how to think about them using the IS curve.
What characteristics of each theoretical area would you look : You have been appointed as program director and have responsibility for several instructional designers and course instructors.
The power of any agency to conduct investigation : The U.S. Constitution imposes significant limits on the power of any agency to conduct an investigation.
Explain how the given affects the is curve : Government purchases: Suppose Congress and the president decide to increase government purchases today, say for national defense.
Identify the global societal issue - gender inequlity : Provide a clear and concise thesis statement that includes a solution to the global societal issue - Explain how this global societal issue impacts a specific

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!

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