When potential gdp increases

Assignment Help Macroeconomics
Reference no: EM133359358

True or False

1. If national income increases by S80 million and consumption increases by S20 million, the marginapropensity to consume is 4.

2. When potential GDP increases, short-run aggregate supply also increases, but long-run aggregate supply does not change.

3. The 'quantity theory of money' argues that an increase in the money supply at a rate that is faster than therate of increase in real GDP will lead to a decrease in the price level in the long run.

4. The Reserve Bank of Australia engages in open market purchase of securities when it wants to decreaseinterest rates.

Reference no: EM133359358

Questions Cloud

Decrease in canadian money supply : Suppose there is a permanent decrease in the Canadian money supply.
Two-period model with perfect substitutes : Does the household have positive consumption in both of the periods or only in one of the two periods? Explain the result.
The level of prices and value of money : Suppose the price level reflects the number of dollars needed to buy a basket of goods containing one can of seltzer, one bag of pretzels, and one shuttle ride.
Predicted high inflation and tight monetary policy : With a 1-year time horizon and considering the predicted high inflation and tight monetary policy from central banks,
When potential gdp increases : When potential GDP increases, short-run aggregate supply also increases, but long-run aggregate supply does not change.
Discuss the tools of monetary policy : Discuss the tools of Monetary Policy in the United States. Discuss the effects of each tool and explore the associated impact on conflicting goals.
Enactment of affordable care act : What has happened to the percentage of population with Any coverage between 2008 and 2016? after the enactment of the Affordable Care Act?
Good is called capital good : What are the three fundmental questions that every economy must answer? A good is called a capital good, in economics, if
Many people are calling for federal minimum wage : Many people are calling for the federal minimum wage to be raised to $15 per hour.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd