Undertake open market purchases or sales

Assignment Help Business Economics

Reference no: EM131084979

Assume that the marginal propensity to save increases. If the Fed wants to keep the level of output from fluctuating, should it undertake open market purchases or sales? In your answer discuss how the composition of GDP is affected.

Reference no: EM131084979

Questions Cloud

Draw the line of equality and the lorenz curve : Consider the following distribution of income in a 12-person economy, with the modern urban wage = 3, the traditional rural income = 1 and the informal urban wage = 2: (1, 2, 3, 1, 2, 3, 1, 2, 3, 1, 2, 1). The poverty line is at 1.5. Derive the table..

What are the phases of photosynthesis : What are the phases of photosynthesis? Can you sketch them for me as well?

Which stakeholders are likely to be involved : Which stakeholders are likely to be involved? What will be their likely attitudes to the various proposals - Which approach to solving the labour shortage problem do you favour? Would you use the same approach for each labour group? Why? Why not?

Explain what happens to short-run output : Suppose the parameters of the IS curve are a = 0, b= 3/4, r = 3% and the real interest rate is initially R = 3%. Explain what happens to short-run output in each of the following scenarios (consider each separately). Be sure to provide a numerical re..

Undertake open market purchases or sales : Assume that the marginal propensity to save increases. If the Fed wants to keep the level of output from fluctuating, should it undertake open market purchases or sales? In your answer discuss how the composition of GDP is affected.

Write a program to implement this process : Write a program to implement this process.

What do these different values of two countries imply : The 2012 Human Development Report reported that the HDI of South Africa was 0.629 (and its rank was 121) and that of the Peru was 0.741 (and its rank was 77). In 2012 South Africa’s GNI per capita (in US dollars) was 7,610 and that of Peru was 6,060...

Detailed diagnosis and a treatment strategy : Propose a detailed diagnosis and a treatment strategy - diet, medication, therapeutic measures, etc. - that properly addresses the condition. Include an explanation of the diagnosis/treatment

Instead smooth consumption across periods : If consumption spending this year (C1) and next year (C2) were perfect complements, would the permanent income hypothesis still hold, in the sense that the consumer would not increase spending by the full amount of a transitory income shock, but woul..

User Account

All Pages