Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Consider a world in which prices are sticky in the short-run and perfectly flexible in the long-run. APPP may not hold in the short run but does hold in the long-run. The world has two countries, the U.S. and Japan. Both countries are initially in a long-run equilibrium with fixed money supplies.

a. Suppose at time T, real GDP in the United States falls permanently. Draw two diagrams with the money market diagram for the US on the left and the expected return in $/ exchange rate ($/yen) diagram on the right. Label the short-run (impact) effect as point(s) B and the long-run effects as point(s) C.

b. What is the immediate effect of the shock in the United States on the U.S. interest rate and the exchange rate ($/yen)? Give two reasons why the exchange rate changes the way it does.

c. How do nominal interest rates, prices, and the exchange rate evolve over time? Please use a separate time series diagram for each variable.

d. Did the exchange rate "overshoot?" If so, identify the overshooting in your diagram.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M939833
  • Price:- $15

Priced at Now at $15, Verified Solution

  • Expert replied

    Solution of the problem in PDF document with Hand-written work includes all the required calculation, diagrams and complete answer of all problems.

Have any Question? 


Related Questions in Microeconomics

The united states has a great consumer demand for health

The United States has a great consumer demand for health care services. The supply of these services or products, such as new medications or medical equipment, is affected by many factors. Select a service or product tha ...

Assignment elasticity and its applicationover the last year

Assignment: Elasticity and Its Application Over the last year your boss has noticed that it would be useful for your firm to understand how consumers behave when variables in the market change and how these changes affec ...

Discussioneconomic structuralism constructivism and

Discussion "Economic Structuralism, Constructivism, and Feminism" Please respond to the following From the second e-Activity, select the theory that you believe has the explanatory and predictive power regarding the conf ...

Assignmentafter read two articles then answer the questions

Assignment After read two articles then answer the questions below Cellini: - How does Cellini criticize Bandinelli's sculpture Hercules and Cacus (1534)? - What technical difficulties does Cellini encounter in making hi ...

Diagnostic assessmentsat its core a diagnostic assessment

Diagnostic Assessments "At its core, a diagnostic assessment is a detailed investigation of children's strengths and skill gaps that permits targeted intervention." (Howard, V. F., & Aiken, E., 2015, p. 282). Informal di ...

Demonstrate how metrics such as valuation economic profit

Demonstrate how metrics such as valuation, economic profit, and related terms are measured and evaluated. Explain the significance and implications of various economic theories pertaining to profit, consumer choice, dema ...

1 black-scholes pde show that the black-scholes price for a

1. Black-Scholes PDE: Show that the Black-Scholes price for a European Put with strike K and expiration T P(t; S t ) = Ke -r(T- t) Φ(-d 2 (T - t, S t )) - S t Φ(-d 1 (T - t, S t )), where d 1 (T - t, S t ) = (log{S t /K} ...

Asignmentit audit and controlchange and patch management1

Assignment IT Audit and Control "Change and Patch Management" 1. Analyze IT change management and patch management processes needed within organizations. Identify three (3) challenges organizations face when implementing ...

Paperpart i submissionit should be a complete polished

Paper Part I Submission: It should be a complete, polished artifact containing all of the critical elements of Final Project Part I, including Sections I and IV, which were not covered in the milestones. The final submis ...

Discussionlong-term investment and cost-benefit analysis

Discussion "Long-Term Investment and Cost-Benefit Analysis" Please respond to the following: • From the scenario for Katrina's Candies, suggest one method in which Herb could use a cost-benefit analysis to argue for or a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate