What the equilibrium interest rates for the federal funds

Assignment Help Business Economics
Reference no: EM1319104

Q. Assume to the equation for autonomous planned spending is Ap = 6,200 - 200r also the value of the multiplier, k, 2.5.

(a) Derive the equation for the IS curve, Y=kAp. Graph the IS curve for interest rates among 0 also 8, with intervals of one-half of a percent (%)age point.

(b) Assume the equation for the LM Curve is Y=13,500 +100r. Utilize this equation to Elucidate the level of income at that there is a zero lower bound on the federal funds rate the interest rate to the Fed controls.

(c) Graph the LM curve for interest rates among 0 also 8, with intervals of one-half of a percent (%)age point.

(d) Assume to the term premium is 1.0 percent (%)age point also the risk premium is 2.0 percent (%)age points. utilize the LM curve with the zero lower bound also term premium also risk premium to graph the LM curve for the government bond rate also the LM curve for the private bond rate at interest rates among 0 also 8, with intervals of one-half of a percent (%)age point.

(e) Utilize the graphs of the IS curve also the three LM curves to Elucidate what the equilibrium interest rates for the federal funds rate the government bond rate also the private bond rate are also Illustrate what the equilibrium level of income is.

Reference no: EM1319104

Reviews

Write a Review

 

Business Economics Questions & Answers

  Accumulated principal plus interest

Illustrate how much will they have accumulated principal plus interest when they reach 65 years old. What is the moral of this situation.

  Mission must comprise apa format

The mission must comprise APA format references on the final slide and in-text references on the slide where information is presented.

  Most effective way to maintain also extend

Explicate your rationale. Once more, with the similar organization in mind, converse the most effective way to maintain also extend a competitive benefit.

  Gas-fired plants would minimize construction costs

what combination of coal-fired plants and gas-fired plants would minimize construction costs.

  Equivalent annual worth of costs

Wwhat is the equivalent annual worth of costs for the website over a total of 6 years at an interest rate of 12% per year.

  Breakeven price for the toy truck

At present, the original manufacturer is deciding either they should continue production of toy truck.

  Word-processing program

Your paper should be written using a word-processing program, likely Microsoft Word otherwise a Word-compatible program.

  Expand its loans by a maximum

Assuming the ABC bank has excess reserves of %5,000, it could prudently expand its loans by a maximum

  Number of tickets sold decreases

Illustrate what is the elasticity of demand if you raise the price of your airline's tickets by 6% also the number of tickets sold decreases.

  Government have to increase the provider of housing

Explain how many units of housing would the government have to increase the provider of housing in order to get the market equilibrium rental cost.

  Important indicators the federal reserve system

Explicate 2 important indicators the Federal Reserve System will use to analyze this particular economic situation.

  Gross receipts of strawberry growers

Illustrate would the gross receipts of strawberry growers be if the crop turned out to be 30,000 cases.

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