Find out how following will affect slope of the output, Ask an Expert

Economics

The problems given below are based on Real Inter temporal model with investment

1. Find out, how following will affect slope of the output demand curve, and describe your results:

a) Inter temporal substitution effect of real interest rate on current consumption increases.

b) Demand for investment goods becomes less responsive to real interest rate

2. On investment diagram(r on vertical axis, I on horizontal axis), sketch firm's investment schedule. Show what occurs to this curve in the following three cases( sketch a separate diagram for each case):

a) Stock of current capital suddenly increases

b) Future total factor productivity decreases

c) Current total factor productivity increases( but not future one)

View complete question

Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M923087

Have any Question?Write your Review or question?

Related Questions in Microeconomics

Question despite the decline in unionization the presence

Question: Despite the decline in unionization, the presence of unions has an impact on labor conditions in the nonunion sector. List and explain three complications that arise in measurement of the pure union wage advant ...

Question a how is full employment defined and why does the

Question: (A) How is full employment defined, and why does the full-employment rate of unemployment keep changing? (B) In December 1998, the BLS reported the following unemployment rates: 1. Unemployed over 15 weeks 1.1% ...

Question you are a leading business executive for the

Question: You are a leading business executive for the following type of company: (A) Pharmaceutical manufacturer, (B) Airline, (C) Computer disc drives, (D) Mortgage broker, (E) Management consultant, (F) Department sto ...

Question a explain how an amplification mechanism may have

Question: a) Explain how an amplification mechanism may have been created from mortgage losses to the effect on the economy. What three factors may have contributed? Explain each. b) Explain the process of a financial cr ...

Question you are running a small prototype pca shop and you

Question: You are running a small prototype PCA shop, and you need to borrow money to buy a new pick and place assembly machine. Your bank offers to lend you $100,000 for 10 years. You must pay $14.903 per year to pay of ...

Question suppose ford motor company issues a five year bond

Question: Suppose Ford Motor Company issues a five year bond with a face value of $5,000 that pays an annual coupon payment of $150. a. What is the interest rate Ford is paying on the borrowed funds? b. Suppose the marke ...

Question the market process the forces that bring us closer

Question: The market process (the forces that bring us closer to equilibrium) is said to solve the knowledge problem. What is the knowledge problem? What aspects of markets help to mitigate the knowledge problem? Provide ...

Question in august 2018 the us federal deficit topped 780

Question: In August 2018, the U.S. federal deficit topped $780 billion and the national debt grew to more than $21 trillion. (You can find real-time numbers for the deficit, debt, and much more at US Debt Clock.) The Con ...

Question consider the market for a software application

Question: Consider the market for a software application. There are 20 consumers who value technical support, which they can only receive if they purchase the application. There are 10 consumers who do not value technica ...

Question use standard ad-as and is-lm analysis to

Question: Use standard AD-AS and IS-LM analysis to illustrate and explain the impact of a monetary expansion in the short run and in the medium run. In your answer, explain why monetary policy is effective in the short r ...

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

Recent Questions

Ask Microeconomics Expert