Shift the AD curve on the previous graph to show the effects of a decrease in the money supply. Note: Select and drag one or both of the curves to the desired position. Curves will snap into position, so if you try to move a curve and it snaps back to its original position, just drag it a little farther. Based on the new price level, the new money supply must be $ the ad curve is downward sloping, velocity is assumed to be constant, trillion in the long run if the velocity of money remains at 3. less than the same as , the percentage decrease in the price level is greater than Because the federal reserve controls M money supply. This illustrates the fact that monetary policy can increase real GDP, Importance of the federal reserve, simple quantity theory of money the percentage decrease in the
Q: Question: Critics of floating exchange rates claim that trade deficits are determined by the ?
A: The value of a country's currency in relation to the currency of another country or economic zone is…
Q: V. Consider a perfectly competitive nonrenewable natural resource industry for which the marginal…
A: Nonrenewable natural resources are those resources which are not replenished quickly with the using…
Q: Figure 3-1 Price (dollars per unit) 25 24 18 ∞ 43 14 13 16 Di 19 25 MC AVC Quantity AC MR
A: The given figure states that the market structure is competitive. Since Marginal revenue is constant…
Q: lesse and Janie are playing a game. On the table in front of them, there are 50 coins. They take…
A: Game theory is a topic of economics in which we analyze the different game strategy or its show the…
Q: Y = AK" L¹". Also assume that the supplies of capital and labor are fixed at K and I, respectively.…
A: Cobb-Douglas: The Cobb-Douglas creation capability is a specific utilitarian type of creative…
Q: 2345 6 370 450 120 50 520 a. Complete the table solving for the missing total utility or marginal…
A: Marginal utility is the delight a buyer gets from each extra unit of utilization. It computes the…
Q: On June 5, 2003, the European Central Bank acted to decrease the short-term interest rate in Europe…
A: A purchase made with the intention of creating income or capital growth is known as an investment.…
Q: Use the data in the following table to solve the question. The commanion tosket i 15 cheeseburgers,…
A: Consumption basket: 15 cheeseburgers 20 pop-tarts 5 ipods Price of each item (in $): Item…
Q: The Oxnard City Bank has deposits of $800 million. It has reserves of $80 million and $300 million…
A: Given Oxnard bank Deposits = 800 Million $ reserves = 80 Million Bond = 300 Million loans = 750…
Q: 7. Which would be better at a 10% discount rate: (1) $61,445.67 today, or (2) $10,000/year starting…
A: “Since you have asked multiple questions, we will solve question #7 for you. If you want any…
Q: Draw the production function graph illustration the three stages (diminishing returns) in the…
A: Incrementing returns, falling returns and negative returns are the three stages of production. The…
Q: 26The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the…
A: Nominal GDP = Current year quantity * Current year price Real GDP = Current year quantity * Base…
Q: Which of the following will have no impact on the demand for Yogurtland frozen yogurt in San Diego?…
A: Note: We will answer one question as the exact one was not specified. Please resubmit a new question…
Q: Suppose a $1 tax is imposed on cigarette manufacturers, which of the following will occur? Group of…
A: Tax Incidence:- A tax incidence is a situation whenever the tax burden is shared by market…
Q: 1. An example of a market where supply and demand are both inelastic. 2. An example of a market…
A: At the marketplace, there are numerous of goods and services with elastic or inelastic demand and…
Q: What is the value at n=21 of a 21 year geometric gradient which increases at a uniform rate of 5%…
A: Given g = 5% A1= $2,263 Rate of interest i =8% n=21 We have to calculate the future value of this…
Q: 4-- Suppose a bank's balance sheet looks like this. The bank is required to hold reserves equal to…
A: Here, the given table shows the balance sheet of a bank and there is 10% reserve requirements in the…
Q: True or False If a firm's average variable cost curve decreases when the firm increases its output,…
A: At the marketplace, a firm's average variable cost curve helps to analyze the per unit variable cost…
Q: Price ($/ton) 439 400 330 300 1. Answer the following questions based on the below diagram of the…
A: Tariff A tariff is a duty a nation imposes on imports of goods and services from another nation.…
Q: Fill in the blanks in the following table and then answer the question that follows. (Note: Round…
A: Marginal Product = Change in Total Product / Change in Input Average Product = Total Product / Units…
Q: Why were monetary policy responses ineffective during the Great Depression?
A: The great depression was characterized by the fall in the aggregate demand. The fall in aggregate…
Q: 9. All else equal (including their discount rates), if Albert now has a higher level of innate…
A: Q9. If a person has higher innate ability would we expect them to have less years of schooling or…
Q: When aggregate supply curve shifts to the right because oil prices are decreasing, then: Group of…
A: In AD/AS diagram a shift in Aggregate Supply curve to the right will result in price level to fall…
Q: Real GDP per capita increases by 9% in the first year and by 5% in the second. After 2 years, what…
A: We assume that the real GDP per capita in Year 0 is $100 After one year in Year 1 our GDP increases…
Q: 4. a) How much is imported before and after the tariff? b) How much tariff revenue is paid to the…
A: A tariff is a tax rate imposed by a country on imported goods. This was usually implemented for the…
Q: 18. The WipeOut Ski Rental Manufacturing company makes skis for beginners. The fixed costs are $30.…
A: In the perfectly competitive market, firm produces where the P=MC. Firm can makes supernormal profit…
Q: What is neoclassical growth model of economic growth?
A: The Neoclassical Growth model of economic growth presents that steady state growth is achieved when…
Q: Discuss how a bank should modify its capital requirements in the light of the pandemic covid 19
A: Capital requirements The amount of liquid capital securities that can be quickly sold that banks…
Q: 13. Suppose Becky is starting a grocery delivery company, which takes grocery orders from customers,…
A: Given; Amount paid for telephone services= $5 Rent of delivery van= $75 Wages of each worker= $100…
Q: Suppose the production function is given by Q=K1/2L1/2, and that Q=30 and K = 36. How much labor is…
A: production function alludes to the utilitarian connection between the amount of a good delivered…
Q: Price ($/ton) 439 400 330 300 1. Answer the following questions based on the below diagram of the…
A: The question is discussing the welfare effects due to international trade and tariffs.
Q: Sara and Fran produce boards and sails for windsurfing. The tables show their production…
A: Comparative advantage refers to the ability to produce goods and services at a lower opportunity…
Q: Comment on the following statement: “The birth of the bond was the second great revolution in the…
A: Bonds are a frequent tool used by enterprises and governments (at all levels) to borrow money.…
Q: When the United States dollar depreciates, which of the following parties will suffer? Group of…
A: Depreciation of currency A currency's value declines when compared to other currencies, which is…
Q: Refer to A-2. The supply curve S1 and the demand curve D show the initial market equilibrium for the…
A: Given the information: The amount of tax = $0.25 per bottle Initial equilibrium price = $1.80…
Q: a) What are the likely short-run and medium-run equilibrium effects of fiscal policy stimulation on…
A: Here fiscal policy stimulation means fiscal policy expansion. Now here we have to show the short run…
Q: Please answer Question 3. Textbook Question so no graded Question here. Practice questions .
A: The tactic that will benefit the player most is the dominating approach. Due of its dominance, it…
Q: Mr Kassim a divorcee promised his former wife a monthly allowance of N10,000 for her maintenance.…
A: Mr. Kassim a divorcee promised his former wife a monthly allowance of N10,000 for her maintenance.…
Q: How will the quantity and price of cars change in response to each of the following separate events?…
A: Market equilibrium occurs due the forces of demand and supply curve when they interest each other…
Q: Reverse e-auctions create tremendous 'power for the buyers because multiple sellers are competing…
A: Reverse auction in economics is basically determined as that type of the auction in which generally…
Q: A monopoly will expand its production until Marginal Revenue -Marginal Cost and charges a prices…
A: Monopoly A monopoly is the form of a market where there is a single seller of the commodity in the…
Q: . Output . The following table shows the costs that a firm in perfect competition (where MR-AR=P)…
A: Meaning of Perfect Competition: The term perfect competition refers to the market under which…
Q: If in a market the last unit of output was sold at a price higher than marginal cost OA. the unit…
A: Given information: In a market, the last unit of output was sold at a price higher than the marginal…
Q: Suppose that daily demand for breakfast sandwiches at a local store is given by the following: Qd =…
A: Given information: Q = 15 - 3P ---------> Demand function; Price elasticity of demand (Point…
Q: Given the products and conditions below, indicate how the events affect the demand, supply,…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: In the long run, the long-run average cost curve whereas in the very long run, the long-run average…
A: There are four production time periods in microeconomics, they are very short run, short run, long…
Q: Firm 1 must decide whether to enter an industry in which firm 2 is an incumbent. To enter this…
A: 1. Firm 1 wants to enter an industry 2. Firm 2 is an incumbent in that industry 3. Firm 1 must…
Q: Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior…
A: HHI before merger=3,150Now,There is a merger between Case and Fiat that has market share of 13% and…
Q: Redstone Clayworks, Inc. is located in Sedona, Arizona and manufactures clay fire pits for patios.…
A: The point of intersection between the market demand and market supply is the equilibrium price where…
Q: Suppose that the world's current oil reserves is R = 2060 billion barrels. If, on average, the total…
A: The measure that depicts the final value of goods and services that are produced during a specified…
pls also do the grph
Step by step
Solved in 3 steps with 1 images
- The following graph shows the aggregate demand curve in a hypothetical economy. Assume that the economy's money supply remains fixed. PRICE LEVEL (CPI) 180 T 150 140 130 120 110 100 90 80 0 Aggregate Demand 100 200 300 400 500 600 REAL GDP (Billions of dollars) 700 800 (?) Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. A higher price level makes domestically produced goods more expensive than foreign goods. A lower price level leads to a lower interest rate. A higher price level decreases consumption through the substitution effect. As the aggregate price level rises, the purchasing power of households' saving balances will demanded to This phenomenon is known as the effect. causing the quantity of outputThe following graph shows a decrease in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the left from AS1 to AS2, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion. 200 AS, 2. 175 AS 150 125 100 75 50 25 50 100 150 200 250 300 350 400 QUANTITY OF OUTPUT The following table lists several determinants of short-run aggregate supply. Fill in the table by indicating the changes in the determinants necessary to decrease short-run aggregate supply. Change Needed to Decrease AS Inflation expectations Human capital Technology PRICE LEVELThe following graph shows a decrease in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the left from ASi to AS2, causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion. (? 200 AS2 175 150 125 100 75 50 25 50 100 150 200 250 300 350 400 QUANTITY OF OUTPUT PRICE LEVEL
- The following graph shows several aggregate demand and aggregate supply curves for an economy whose potential output is $4 trillion. The curves are labelled a, b, c, and d. Three points on the graph are also indicated by grey stars and labelled X, Y, and Z. PRICE LEVEL 160 150 140 130 120 110 100 90 80 0 с 1 d a 2 3 5 REAL GDP (Trillions of dollars) 6 7 b ? Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the graph, choose Not Shown.The following graph shows an increase in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the right from AS, to AS₂, causing the quantity of output supplied at a price level of 100 to rise from $200 billion to $250 billion. PRICE LEVEL 200 175 150 125 100 75 50 25 0 0 50 AS, AS 100 150 200 250 300 350 400 QUANTITY OF OUTPUT The following table lists several determinants of short-run aggregate supply. Regulations on the firm Human capital Inflation expectations Complete the table by selecting the changes in each scenario necessary to increase short-run aggregate supply. Change Necessary to Increase ASThe following graph shows an increase in aggregate demand (AD) in a hypothetical country. Specifically, aggregate demand shifts to the right from AD1 to AD2, causing the quantity of output demanded to rise at all price levels. For example, at a price level of 140, output is now $400 billion, where previously it was $300 billion. 170 160 150 140 - 130 AD2 120 110 AD, 100 90 100 200 300 400 500 600 700 800 OUTPUT (Billions of dollars) The following table lists several determinants of aggregate demand. Complete the table by indicating the change in each determinant necessary to increase aggregate demand. Change Needed to Increase AD Wealth Taxes Interest rates The value of the domestic currency relative to the foreign currency PRICE LEVEL
- The graph below is associated with a hypothetical country. Consider a decrease in aggregate demand (AD). Specifically, aggregate demand shifts to the left from AD to AD₂, causing the quantity of output demanded to fall at each price level. For instance, at a price level of 140, output is now $200 billion, where initially it was $300 billion. PRICE LEVEL 170 160 150 140 130 120 110 100 8 90 0 100 AD₁ AD₂ 200 300 400 500 600 OUTPUT (Billions of dollars): 700 800 ?The following graph shows a hypothetical economy that uses the dollar as its currency. The economy is in short-run equilibrium at an output level of 300 billion and a price level of 60. Suppose that the economy's potential output is $200 billion. Use the purple line (diamond symbols) to plot the long-run aggregate supply (LRAS) curve on the graph. 120 100 SRAS AD 80 SRAS LRAS AD 20 100 200 300 400 500 600 REAL GDP (Index numbers) This economy's output is potential output. To restore the economy to its potential, the government could use v fiscal policy Shift either the AD curve or the SRAS curve to illustrate the changes consistent with the chosen government policy Suppose that the marginal propensity to consume in this economy is 0.80. Assume, for simplicity, that there are no taxes or other factors that could alter the multiplier effect of a change in government expenditures. The economy's expenditure multiplier is , which means that the government must alter its expenditures by to…The following graph shows several aggregate demand and aggregate supply curves for an economy whose potential output is $5 trillion. The curves are labelled a, b, c, and d. Three points on the graph are also indicated by grey stars and labelled K, L, and M. 100 90 80 M. 70 60 50 b 40 30 a 20 2 3 4 5 6 7 REAL GDP (Trillions of dollars) Identify which curve on the previous graph corresponds to each description in the following table. If the curve described does not appear on the graph choose Not Shown. Description b Not Shown a Long-run aggregate supply (LRAS) Short-run aggregate supply (SRAS) when the economy is at long-run equilibrium Short-run aggregate supply (SRAS) when there is an inflationary gap Short-run aggregate supply (SRAS) when there is a recessionary gap Aggregate demand (AD) PRICE LE VEL
- Suppose an economist believes that the price level in the economy is directly related to the money supply, or the amount of money circulating in the economy. The economist proposes the following relationship: P=A×MP=A×M • P=Price LevelP=Price Level • M=Money SupplyM=Money Supply • A=A composite of other factors, including real GDP, that change very slowly over time.A=A composite of other factors, including real GDP, that change very slowly over time. How might an economist gather empirical data to test the proposed relationship between money and the price level?Consider the following changes in the macroeconomy and show how to think about them using the IS curve. Explain how and why GDP is affected in the short run (assuming the real interest rate is constant). 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. A booming economy in Europe this year leads to an unexpected increase in demand by European consumers for US goods. US consumers suddenly love all things made in Brazil and sharply increase their imports from that country. A housing bubble bursts so that housing prices fall by 20% and new home sales drop sharply.The following graph shows a decrease in short-run aggregate supply (AS) in a hypothetical economy where the currency is the dollar. Specifically, the short-run aggregate supply curve shifts to the left from AS 1 to AS 2 , causing the quantity of output supplied at a price level of 100 to fall from $200 billion to $150 billion. The following table lists several determinants of short-run aggregate supply. Fill in the table by indicating the changes in the determinants necessary to decrease short-run aggregate supply.