Questions from Macroeconomics

Q: A change in the expected price level shifts a. the

A change in the expected price level shifts a. the aggregate-demand curve. b. the short-run aggregate-supply curve, but not the long-run aggregate-supply curve. c. the long-run aggregate-supply curve...

Q: Suppose an economy is in long-run equilibrium. a

Suppose an economy is in long-run equilibrium. a. Use the model of aggregate demand and aggregate supply to illustrate the initial equilibrium (call it point A). Be sure to include both short-run and...

Q: List and explain the three reasons the aggregate-demand curve slopes

List and explain the three reasons the aggregate-demand curve slopes downward.

Q: Explain the three reasons the aggregate-demand curve slopes downward.

Explain the three reasons the aggregate-demand curve slopes downward. Give an example of an event that would shift the aggregate-demand curve. In which direction would this event shift the curve?

Q: The government of a country increases the growth rate of the money

The government of a country increases the growth rate of the money supply from 5 percent per year to 50 percent per year. What happens to prices? What happens to nominal interest rates? Why might the...

Q: Suppose that a fall in consumer spending causes a recession.

Suppose that a fall in consumer spending causes a recession. a. Illustrate the immediate change in the economy using both an aggregate-supply/aggregate- demand diagram and a Phillips-curve diagram. On...

Q: Suppose GDP is $8 trillion, taxes are $1.

Suppose GDP is $8 trillion, taxes are $1.5 trillion, private saving is $0.5 trillion, and public saving is $0.2 trillion. Assuming this economy is closed; calculate consumption, government purchases,...

Q: In a system of fractional-reserve banking, even with-

In a system of fractional-reserve banking, even with-out any action by the central bank, the money supply declines if households choose to hold ________ currency or if banks choose to hold ________ ex...

Q: Happy Bank starts with $200 in bank capital. It then

Happy Bank starts with $200 in bank capital. It then accepts $800 in deposits. It keeps 12.5 percent (1/8th) of deposits in reserve. It uses the rest of its assets to make bank loans. a. Show the bala...

Q: Why don’t banks hold 100-percent reserves? How is the

Why don’t banks hold 100-percent reserves? How is the amount of reserves banks hold related to the amount of money the banking system creates?