Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Problem:

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

Required:

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

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

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

d. Did the exchange rate ‘overshoot?’ If so, recognize the overshooting in your diagram.

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M913988

Have any Question? 


Related Questions in Macroeconomics

Intellectual propertyintellectual property ip and

Intellectual property "Intellectual Property (IP) and Preventing IP Theft" Please respond to the following: 2. a. What are some of the economic and safety consequences of IP theft. Research examples for us, such as count ...

Market structures microeconomicsin an eight- to 10-page

Market Structures (Microeconomics) In an eight- to 10-page paper, describe each market structures (perfect competition, monopolistic competition, oligopoly, monopoly), provide a real-life example of each market, and resp ...

A large country named h is considering an export subsidy to

A large country named H is considering an export subsidy to promote the industry that produces good X. The country's excess supply curve is P=2000+2X. The world's excess demand curve is P=5000-10X. a.) What is the equili ...

The stock market is like a casino and buying stock is just

The stock market is like a casino and buying stock is just like placing a bet. Stocks are risky but with good research and prudent planning one can earn significant returns. Pick a statement and defend it.

Assignmenti philips curve suppose that the philips curve is

Assignment I. Philips Curve: Suppose that the Philips curve is given by πt = πet + 0.1 -2ut a. What is the natural rate of unemployment? b. Assume πet = θπt-1 and suppose that θ is equal to 0. Suppose that the rate of un ...

Essayi directions please complete a 5-10 essay response the

Essay I. Directions: Please complete a 5-10 essay response the following topic. Do use lecture notes, scholarly books and articles as well as documents for supportive data. What is Marxism? How is it similar as well as d ...

Topic nbspfree trade - pro or conafter reading the heritage

Topic.  Free Trade - Pro or Con? After reading the Heritage Foundation's guide for policy-makers, give one example from your own life of of a way in which you have benefitted from free trade.  Is there any way in which y ...

Do you agree or disagree with one of the following

Do you agree or disagree with one of the following statements (just need to pick one)? Find an article that supports your claim. Summarize the article and write a short paragraph explaining your opinion. There is no righ ...

An accident has occurred causing 10000 in harm to the

An accident has occurred, causing $10,000 in harm to the victim.  The amount of harm done is undisputed and easy to prove; punitive damages are not applicable, so any damage award would be for exactly $10,000. This type ...

Why do we need microeconomicswhat makes perfect competitive

Why do we need microeconomics? What makes Perfect competitive firm efficient market? Explain the elasticity of demand and taxes. Explain increase demand and increase in quantity demanded. What makes pure monopoly an inef ...

  • 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

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen