Elucidate effect of this policy action on size money supply

Assignment Help Business Economics

Reference no: EM1367339

Q. Q1.Consider an economy in which GDP is $7.2 trillion, public saving is -$0.5 trillion (yes, it is a negative number), taxes are $0.8 trillion, private saving is $3.0 trillion, export is $0.4 trillion and import is $0.5 trillion. Estimate consumption, government purchases, national saving and investment. Please show all work.

Q2.Assume that it is year 2014 and economy is showing a clear sign of overheating. Facing with this situation, Fed decides to raise discount rate and Fed funds rate. Illustrate what is effect of policy action described above, especially an increase in discount rate, on size of money supply? On inflation rate, elucidate in detail. Assume that in addition to policy action described above, Fed decides to sell a massive amount of Treasury bonds from open market. Elucidate in detail effect of this policy action on size of money supply.

Q3. Smith, a U.S. citizen, has been working in California as an executive of a U.S. telecommunication company and her yearly salary in 2009 was US$300,000. Her salary was expected to remain unchanged if she continued to work in company. In year 2010, though, she was recruited by a telecommunication company in Mexico, so she started working in Mexico in January 2010, making an yearly salary of US$200,000. Reason why she accepted a job in Mexico with a lower salary than current job is unknown. Assuming that amount of her salary equals amount of her contribution to production in company she works for, how much yearly U.S. GDP and GNP in 2010 changed due to her job relocation? Clearly show your reasoning for your answer.

Reference no: EM1367339

Questions Cloud

Illustrate new equilibrium an increase expenditure : Illustrate what would be new equilibrium if re is an increase in autonomous import expenditure from 100 to 200 which result from an increase in currency exchange rate.

Find out the magnitude of the vertical component : The displacement of a particle moving under uniform acceleration is some function of elapsed time and acceleration. Suppose we write this displacement as: s=ka^mt^n where k is the dimensionless constant.

Determine the cross rate between francs and pounds : Assume the exchange rate between United State, dollars and the Swiss franc was SFr1.6=$1, and the exchange rate between United State dollars and British pound was L1=$1.50.

Determine time to transmit text over a t-1 line : Be sure to allow for spaces and punctuation between words. How long would it take to transmit the text over a T-1 line at 1.544Mbps and a fibre optic link at 2.488Gbps?

Elucidate effect of this policy action on size money supply : Assume that in addition to policy action described above, Fed decides to sell a massive amount of Treasury bonds from open market. Elucidate in detail effect of this policy action on size of money supply.

Determine dollar price of the car : In September 1983, it took 245 Japanese yen to equal $1. More than twenty years later that exchange rate had fallen to 108 yen to $1.

How many revolutions will the car : An airplane must reach a speed of 189mi/h to take off. If the runway is 472m long, what is the minimum value of acceleration that will allow the airplane to take off successfully.

Subnets diagram working lan depicting network subnets : Subnet classful Class C network into 2 subnets Diagram working LAN depicting two network subnets (can be in Word of Visio) Network should include

Illustrate what evidence might you bring to hearing : A hearing is scheduled for your company to Current arguments that your industry has not increased its market power through this merger. Can you do this. How. Illustrate what evidence might you bring to hearing.

User Account

All Pages