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figure 11-1 illustrates the federal reserves response to the 2001 recession in the united states how do central banks
box 11-1 investigates the case of the liquidity trap in japan showing that interest rates have been virtually zero
it is sometimes said that a central bank is a necessary element for a balance-of-payments deficit what is the
in figure 11-10 the economy can move to full employment by an expansion in either money or the full-employment deficit
the economy is at full employment now the government wants to change the composition of demand toward investment and
we can have the gdp path we want equally well with a tight fiscal policy and an easier monetary policy or the reverse
what would the lm curve look like in a classical world if this really were the lm curve that we thought best
what happens when the fed monetizes a budget deficit is this something it should always try to do hint outline the
what is crowding out and when would you expect it to occur in the face of substantial crowding out which will be more
the united states during the 1980s found its rate of personal saving to be particularly low it also during that time
what are the similarities between the life-cycle and the permanent-income hypotheses do they differ in their approaches
a suppose you earn just as much as your neighbor but are in much better health and expect to live longer than she does
the text implies that the ratio of consumption to accumulated saving declines over time until retirementa why what
go to httpresearchstlouisfedorgfred2 click on exchange rates and then by country find two countries that had a fixed
what is the effect of a fiscal expansion on output and interest rates when exchange rates are fixed and capital is
illustrate graphically the effects of a fiscal expansion when capital is mobile and both prices and exchange rates are
suppose you expect the pound to depreciate by 6 percent over the next year assume that the us interest rate is 4
assume that capital is perfectly mobile the price level is fixed and the exchange rate is flexible now let the
your country is in recession you feel that a policy of exchange rate depreciation will stimulate aggregate demand and
we have seen that investment spending constitutes about 13 percent of aggregate demand gdp in the united states are
the graph below shows the lifetime earnings profile of a person who lives for four periods and earns incomes of 30 60
describe how a car rental agency would calculate the price at which it rents cars and relate your description to the
optional for this question use the cobb-douglas production function and the corresponding desired capital stock given
suppose that 70 percent of a countrys population as a consequence of liquidity constraints behaves in accordance with
suppose the real interest rate has increased from 2 to 4 percenta what will happen to the opportunity cost of consuming