What open market policy would recommend to increase income

Reference no: EM13183602

Say that investment increases by 100 for each interest rate drop of 1 percent. Say also that the expenditures multiplier is 3. If the money multiplier is 5, and each 5-unit change in the money supply changes the interest rate by 1 percent, what open market policy would you recommend to increase income by 300?

Reference no: EM13183602

Questions Cloud

Absorption costing net operating income : Determine each years absorption costing net operating income. Present your answer in the form of a reconciliation report as shown in Exhibit 7-4.

Explain the use of determinants of elasticity : Why is the concept of elasticity important? What does it tell economists? Tell whether you would classify automobile production as either elastic or inelastic in the short run and long run. (Keep in mind that we are talking here about supply elas..

If it decreases the price will revenue increase : The Teenager Company makes and sells skateboards at an average price of $70 each. During the past year, they sold 4,000 of these skateboards. The company believes that the price elasticity for this product is about -2.5. If it decreases the price ..

Why contractionary policies are unpopular : A political commentator argues: "Congress and the President are more likely to enact an expansionary fiscal policy than a contractionary fiscal policy because expansionary policies are popular and contractionary policies are unpopular". Explain..

What open market policy would recommend to increase income : Say that investment increases by 100 for each interest rate drop of 1 percent. Say also that the expenditures multiplier is 3. If the money multiplier is 5, and each 5-unit change in the money supply changes the interest rate by 1 percent, what op..

How much polyglue should alchem produce : Alchem (L) is the price leader in the polyglue All 10 other manufacturers (follower [F] firms) sell polyglue at the same price as Alchem. Alchem allows the other firms to sell as much as they wish at the established price and supplies the remaind..

Explain absolute macroeconomic equilibrium : Explain and illustrate what is expected to happen to an economy in "absolute macroeconomic equilibrium when, ceteris paribus, there is an established concerted policy to bring down loanable interests rates. Use both, the Aggregate Expenditure grap..

The total fixed operating costs per month : Using the high-low method, estimate - The variable cost per occupied bed on a daily basis and the total fixed operating costs per month.

Find the monopolists profit-maximizing price : Suppose the demand curve for a monopolist is QD = 250. - .25P,and the marginal revenue function is MR = 1000 - 8Q.The monopolist has a constant marginal and average total cost of $45 per unit. Find the monopolist's profit-maximizing price.

User Account

All Pages