Questions from Macroeconomics


Q: Show graphically that the more interest rate insensitive the investment demand curve

Show graphically that the more interest rate insensitive the investment demand curve is, the less likely it is that monetary policy will be effective at changing Real GDP.

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Q: In each of parts (a)-(d), which panel in

In each of parts (a)-(d), which panel in the accompanying figure best describes the situation? (a) Expansionary monetary policy that removes the economy from a recessionary gap (b) Expansionary mone...

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Q: What does the nominal interest rate equal, given the following:

What does the nominal interest rate equal, given the following: (a) Real interest rate = 3 percent; expected inflation rate = 1 percent (b) Real interest rate = 5 percent; expected inflation rate = -...

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Q: According to market monetarists, what problems might arise from a sharp

According to market monetarists, what problems might arise from a sharp decline in Nominal GDP?

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Q: How will things change in the AD-AS framework if a

How will things change in the AD-AS framework if a change in the money supply is completely offset by a change in velocity?

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Q: According to the Taylor Rule, if inflation is 8 percent and

According to the Taylor Rule, if inflation is 8 percent and the GDP gap is 3 percent, what is the recommendation for the federal funds rate target?

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Q: Use the accompanying figure to answer questions a and b.

Use the accompanying figure to answer questions a and b. (a) Suppose the economy is self-regulating and is at point A when there is a one-shot demand-induced inflation. If there are no ot...

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Q: What does the real interest rate equal, given the following:

What does the real interest rate equal, given the following: (a) Nominal interest rate = 8 percent; expected inflation rate = 2 percent (b) Nominal interest rate = 4 percent; expected inflation rate...

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Q: Illustrate graphically what would happen in the short run and in the

Illustrate graphically what would happen in the short run and in the long run to the price level and Real GDP level if individuals hold rational expectations, prices and wages are flexible, and indivi...

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Q: Illustrate graphically what would happen in the short run and in the

Illustrate graphically what would happen in the short run and in the long run to the price level and Real GDP if individuals hold rational expectations, prices and wages are flexible, and individuals...

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