What is the real economic growth rate in your graph

Assignment Help Business Economics
Reference no: EM131173411

Assume that wages and prices are sticky and that we start at a long run equilibrium. Assume that at this initial point, the growth rate of the money supply is 6%, the growth rate of the velocity of money is 5% and that the real economic growth rate is 4%. Assume that there is a drop in consumption and investment such that causes total spending growth to drop by 5%. Assume now that the Federal Reserve is going to try and counter this drop in consumption and investment through monetary policy, and that they increase the growth rate of the money supply by 9%.

After consumption and investment fall (and before Federal Reserve action), what is the inflation rate in your graph?

After Federal Reserve action, what is the growth rate of the velocity of money?

After Federal Reserve action, what is the real economic growth rate in your graph?

Reference no: EM131173411

Questions Cloud

Ahmed has a recurring deposit account in a bank : Ahmed has a recurring deposit account in a bank. He deposits rs. 2500 per month for 2 years. If he gets rs. 66250 at the time of maturity, Find  (i) the interest paid by the bank  (ii) the rate of interest
Briefly describe the current event described in the article : Briefly describe the current event described in the article. What issue or question you will you be focusing on in your analysis? What are the conflicting points of view?
If the middle number is doubled then the numbers are in ap : 1. If the middle number is doubled, then the numbers are in A.P. The common ratio of G.P is.........
Analyze chosen organization security policies and procedures : Analyze the chosen organization's security policies and procedures, and provide an opinion of whether or not its policies and procedures are strong from an information security standpoint. Justify your opinion utilizing specific examples from your..
What is the real economic growth rate in your graph : Assume that wages and prices are sticky and that we start at a long run equilibrium. Assume that at this initial point, the growth rate of the money supply is 6%, the growth rate of the velocity of money is 5% and that the real economic growth rate i..
What is the expected value of rearden : 1. What is the expected value of Rearden's assets if it were run eciently? 2. Suppose that the managers at Rearden Metal can increase risk to maximize the expected payo to equity holders. If Rearden has $180 million in debt due in one year, what i..
Find the pmf and the expected value of the number of tosses : Assume now that the coin is tossed until we obtain a tail that is immediately preceded by a head. Find the PMF and the expected value of the number of tosses.
The minimum value of the sum of real numbers : 1. The minimum value of the sum of real numbers a-5 , a-4 , 3a-3 ,1 , a8 , a10 with a > 0 is .............
How can learners overcome math anxiety : What is math anxiety and where does it stem from? How can learners overcome math anxiety? Research the questions via online resources and/or through discussions with math teachers or tutors.

Reviews

Write a Review

Business Economics Questions & Answers

  The extraction rate of iron ore when

What should happen to the extraction (usage) rate of iron ore when.  There are two general methods that governments use to sell mineral rights to the private sector. One is production royalties where the private firm promises to pay a certain amount ..

  Difference in inflation rates among industrialized nations

The difference in inflation rates among industrialized nations is often only a few percentage points. Nevertheless, annual exchange rates among currencies of industrialized nations have changed by more than 10% in some years. Evaluate what this sugge..

  The net first cost of purchasing the new gear hobber

A company owns a 8-year old gear hobber that has a book value of $62,000. The present market value of the hobber is $86,000. A new gear hobber can be purchased for $465,000. Using an outsider’s point of view, what is the net first cost of purchasing ..

  To what extent was choose and book a failure

Clarify and describe the problems of the NHS Choose and Book System what management, organization and technology factors were responsible for those problems? To what extent was Choose and Book a failure? Explain your answer. What was the economic and..

  General theory of employment-interest and money

In The General Theory of Employment, Interest, and Money, John Maynard Keynes wrote: If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coal mines which are then filled up to the surface with town rubbish..

  Model of educational attainment better explains these facts

Consider the following facts. After the age of 25, persons with college degrees earn more than persons with no education beyond their high school degrees, ceteris paribus. Moreover, persons with high school degrees earn the same as persons who have h..

  Small open economies-fixed and flex-Mundell-Fleming model

Two small open economies, Fixed and Flex, can be described by the Mundell-Fleming model. The countries are otherwise identical except that Fixed maintains a fixed exchange rate, while Flex maintains a flexible exchange-rate regime. The governments of..

  Several units of homogeneous product as single package

A monopoly is considering selling several units of a homogeneous product as a single package. A typical consumer’s demand for the product is Qd = 110 - 0.25P, and the marginal cost of production is $160. Determine the optimal number of units to put i..

  How gdp measured by the value added approach

Canadian GDP whether measured by the value added approach, the expenditure approach, or the income approach.

  Calculate contractual allowance

Helen has a hospital bill of $14,000. 90% of the bill is allowable under her insurance. She has an $800 deductible with a 15% coinsurance. Calculate Contractual Allowance, the amount paid by the insurance company and the amount that Helen must pay.

  Calculate the amount of income tax and the average tax rate

A flat tax plan allows individuals to deduct a standard allowance of $10,000 from their wages. Assume that the flat tax rate is 12%. Calculate the amount of income tax and the average tax rate if you were earning: $30,000 a year $60,000 a year

  Observe in an industry with rapidly changing technology

What type of compensation policy would you expect to observe in an industry with rapidly changing technology? Explain. Suppose you are the owner-operator of a gas station in a small town. Over the past 20 years, you and your rival successfully kept p..

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