Monetary policy is an effective way to increase demand

Reference no: EM13694564 , Length: 200 Words

Monetary policy is an effective way to increase demand, if you're the sort of economist that believes the government should meddle in the economy. In an paragraph, thoroughly explain how monetary policy affects each of the four components of aggregate demand, why monetary policy changes each component of aggregate demand, and how monetary policy is able to cause these affect.

Reference no: EM13694564

Questions Cloud

Is the demand for iphones price inelastic or elastic : If the price of gasoline doubled, how would consumption of (a) cars, (b) public transportation, and (c) in-theatre movies be affected? How quickly would these adjustments be made?

Perfectly competitive industry is in long-run equilibrium : Suppose that a perfectly competitive industry is in long-run equilibrium, and demand increases. Explain the short and long- run effects on the firm and the industry.

Disregarding inflation : A hospital would replace five personnel that currently cover three shifts per day. 365 days per year. Each person earns $35,000 per year. Company-paid benefits and overhead are 45% of wages. Money costs 8% after income taxes.

Find the new concentration ratio : There are 10 firms of equal size in an industry. If 2 of the firms merge (a) find the new concentration ratio; (b) find the new herfindahl-hirschman index.

Monetary policy is an effective way to increase demand : Monetary policy is an effective way to increase demand, if you're the sort of economist that believes the government should meddle in the economy. In an paragraph, thoroughly explain how monetary policy affects each of the four components of aggregat..

Reason for the subsidies being provided to u.s. farmers : Which of the following is not a reason for the subsidies being provided to U.S. farmers?

Pigouvian tax depends on knowing both pmc and demand : In a sentence or two explain why the pigouvian tax depends on knowing both pmc and demand. If total damages are linear, do we still need to know PMC and demand in order to set the optimal tax?

What will be the LR equilibrium number of firms in industry : Consider a competitive industry with a large number of firms, all of which have identical cost functions c(y)=y2+1 for y>0 and c(0)=0. Suppose that initially the demand curve for this industry is by D(p)=52-p. (The output of a firm does not have to b..

What is the numerical value of the multiplier : If consumers decrease their spending by 80$ whenever their disposable income falls by 100$, what is the numerical value of the marginal propensity to consume? What is the numerical value of the multiplier?

User Account

All Pages