Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Put yourself in the shoes of an economic policymaker. The economy is in equilibrium with P=100 and Q=3000=potential GDP. You refuse to "accommodate" inflation; that is, you want to keep prices absolutely stable at p=100, no matter what happens to output. You can use monetary and fiscal policies to affect aggregate demand, but you cannot affect aggregate supply in the short run. How would you respond to:

a: A surprise increase in investment spending
b: A sharp food-price increase following catastrophic floods in the Mississippi River.
c: A productivity decline that reduces potential output.
d: A sharp decrease in net exports that followed a deep depression in East Asia.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M961528

Have any Question?


Related Questions in Microeconomics

Question the united states currently uses a voting system

Question: The United States currently uses a voting system called "first past the post" in elections, meaning that the candidate with the most votes wins. What are some of the problems with a "first past the post" system ...

Question - suppose there is a relationship between park

Question - Suppose there is a relationship between park land and timber extraction of the following sort: Park Land (00 acres) 20, 18, 14, 8, 0 Timber ($) (000) 0, 1, 2, 3, 4 Draw the PPC between park land and timber ext ...

Question in 1964 and 1965 a 20 reduction in personal and

Question: In 1964 and 1965, a 20% reduction in personal and corporate income tax rates was followed by a budget surplus. In 1982 and 1983, a 20% reduction in personal and corporate income tax rates was followed by a budg ...

Question 1 what potential problems and benefits likely

Question: 1. What potential problems and benefits likely with early or flexible retirement programs? provide specific example 2. Should either unions or management be concerned with the apparently small effect of higher ...

Question what are the six most important provisions of gatt

Question: What are the six most important provisions of GATT? What are relative merits of those provisions? What the extension of GATT to World Trade Organization WTO involves? How do you relate WTO to Globalization? The ...

Question give an original concise but thorough answer to

Question: Give an original concise but thorough answer to the following questions. a. Compare the shareholder and stakeholder models of corporate governance. Which one seems to predominate today? What implications does t ...

Question a manager is considering two technological lines

Question: A manager is considering two technological lines to produce candies. The first one requires $1 million in initial investment and produces 150 kilograms (kg) of candies per day. The second one requires $1.3 mill ...

Question in 1914 henry ford increased the wage he paid

Question: In 1914, Henry Ford increased the wage he paid workers in his car factory in Dearborn, Michigan to $5 per day. This wage was more than twice as much as other car manufacturers were paying. Ford was quoted as sa ...

Question for all of their diversity many less developed

Question: For all of their diversity, many less developed countries are linked by a range of common problems. What are these problems? State only FOUR (4) characteristics of the developing world. Which do you think are t ...

Quesiton the firms demand for labor is a derived demanda

Quesiton: The firm's demand for labor is a derived demand. A. Explain the law of diminishing marginal returns and show graphically how it affects labor demand curves. B. Explain and show graphically why the marginal reve ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As