Will the change make monetary policy more or less effective

Assignment Help Macroeconomics
Reference no: EM13222888

We have assumed that consumption depends only on disposable income. Now suppose that consumptions depend on both disposable income and interest rate. As interest rate increase, consumption decrease.

a. If consumption suddenly begins to depend on interest rate, what is the effect on the slope of the IS curve?

b. Will this change make monetary policy more or less effective? explain

Reference no: EM13222888

Questions Cloud

A carbon monoxide is a toxic pollutant found in our city air : Carbon Monoxide is a toxic pollutant found in our city air. On a particular day, the air contains 6.50mg of CO per 1.000X cubic meter of air. How many grams of CO are present in a room whose dimensions are 15.0 meters X 11.0 meters X 16.5 meters?
What effect did reducing the requirements to get disability : Between 1984 and 2001, the U.S. government made it much easier to get disability payments and the number of disabled people more than doubled from 3.8 million to 7.7 million. Once on disability, citizens then count as "out of the labor force."
Explain how many beta particles are emitted : Chlorine-36 is a B emitter, with a half-life of 3.0*10^5years. How many beta particles are emitted in 1.5 min from a 5.4mg sample Chlorine-36?
Explain the substance is magneiusm oxide : how to do the Empirical Formula is confusing. The substance is Magneiusm Oxide with .16G. The mass of Magneisum is .12G
Will the change make monetary policy more or less effective : We have assumed that consumption depends only on disposable income. Now suppose that consumptions depend on both disposable income and interest rate. As interest rate increase, consumption decrease. a. If consumption suddenly begins to depend on in..
What is burger kings core competency : What is Burger King's core competency? How does it relate to its chosen strategy and how would you explain how Burger King has decided to configure and coordinate its value chain? Which of Burger King's value chain activities create the most value ..
What type of prisons house the most serious offenders : What type of prisons house the most serious offenders and are characterized by double and triple security patterns?
Determine the heat transferred of ethylene glycol : Find the heat transferred (in kJ) when 5.50 L of ethylene glycol (d = 1.11 g/mL, see Table 6.2 for c) in a car radiator cools from 37.7°C to 23.0°C.
What feature of eastern and western penitentiaries : What feature of Eastern and Western penitentiaries most clearly characterized the 19th Century Pennsylvania correctional philosophy?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Show your selection of the determinants of demand and supply

More demand and supply should be included in your analysis Warning: you are not required to "prove" or show your selection of the determinants of demand and supply. But your discussion and selection must be reasonable.

  How automakers have increased their output ever faster

At the same time, Chinese consumers' incomes have risen. Assume that cars are a norma good. Use a diagram of the supply and demand curves for cars in china to explain what has happened in the Chinese car market.

  Define different price-elasticities of demand

For each market (a. & b.) would it be to the producer's advantage (i.e. would TR increase) to raise or lower price? If P0 = $10.00 and Q0 = 100 units, justify your answers by applying the interpretations of those price-elasticities of demand on t..

  Assume that the market demand for broccoli

Assume that the market demand for broccoli is given by Q=1000-5P and the market supply of broccoli is given by Q=4P-80 where Q is quantity per year measured in hundreds of bushels an P is price in dollars per hundred bushels.

  Briefly explain whether tarbo has a dominant strategy

Suppose that Wal-World and Tarbo are independently deciding whether to implement a new bar code technology. It is less costly for their suppliers to use one system and the following payoff matrix shows the profits per year for each company.

  Estimate value of the benefit that each unit provides

The market demand for a public good can be determined by A)adding up how much each consumer is willing to pay for each unit of the public good. B) Adding up how much each citizen expects to consume at each possible price C) Adding up the total pri..

  Budget deficits and its effects on us businesses

What do you think about current and projected budget deficit [over 500 Billion this year and coming years] and do you support Bush's economic policy to cut tax and run the Federal government through lending?

  Explain how much will your industry total revenues

Explain how much will your industry's total revenues (revenues from both products) change if you increase the price of good X by 1 percent.

  Imposition of tax and its impact on cost curves

How would each of the following affect the firm's marginal, average, and average variable cost curves?

  Explain the types of economics systems

Explain how do the types of economics systems capitalism , socialism, and communism fall under : market , tradition, and command.

  In a monopolistically competitive marketplace

In a monopolistically competitive marketplace, a firm has market power because it produces a differentiated product. This means that the firm earns positive economic profit in the long run.

  A nation to have commercial relations with other countries

a nation to have commercial relations with other countries

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