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In the diagram for this exercise, use aggregate demand and aggregate supply curves. Illustrate how a change in aggregate demand would cause deflation.
In the diagram for this exercise, use aggregate demand and aggregate supply curves. Illustrate how cost-push inflation arises.
In the diagram for this exercise, use aggregate demand and aggregate supply curves to show an economy initially. Illustrate how demand-pull inflation arises.
Compare the rates on these inflation indexed bonds with nonindexed U.S.Treasury bonds.
Use the aggregate demand and supply model to describe the effect of the proposal- if enacted-on the U.S. unemployment and inflation rates.
(Measuring Unemployment) The chapter explains the definitions the government employs in measuring unemployment.
Using a demand-supply diagram for loanable funds, show what happens to the nominal interest rate and the equilibrium quantity of loans.
(Sources of Inflation) Using the concepts of aggregate supply and aggregate demand, explain why inflation usually increases during wartime.
Review the Business Bulletin column on the front page of Thursday's Wall Street Journal. What are some recent trends in investment spending?
Use the data to compute the marginal propensity to consume for each year, 1991 to 2004. Has the MPC been relatively constant?
Suppose that consumption equals $500 billion when disposable income is $0 and that each increase. Draw a graph of the saving function using this information.
If the MPC increases, what must happen to the MPS? How is the MPC related to the consumption function? How is the MPS related to the saving function?
What factors are assumed constant along the net export function? What would be the impact on net exports of a change in real disposable income?
How do changes in disposable income affect government purchases and the government purchase function? How do changes in net taxes affect consumption function?
(Nonincome Determinants of Investment) What are some factors assumed to be constant along the autonomous planned investment function?
What are the components of gross private domestic investment? What is the difference between the investment curve?
A number of factors can cause the consumption function to shift. What, if anything, happens to the saving function when the consumption function shifts?
(The Aggregate Demand Curve) What is the effect of a lower price level, other things constant, on the aggregate expenditure line and real GDP demanded?
(When Output and Spending Differ) What role do inventories play in determining real GDP demanded?
Analyze what equalities hold at the level of real GDP demanded? When determining real GDP demanded, what do we assume about the price level?
(Real GDP Demanded) In your own words, explain the logic of the income-expenditure model. What determines the amount of real GDP demanded?
Analyze what are the components of aggregate expenditure? In the model developed in this chapter, which components vary with changes in the level of real GDP?
Illustrate how a decrease in the value of U.S. dollar could lead? Illustrate the effect of a decrease in the value of the currency of a major trading partner.
Illustrate the effect on the function of an inprovement in business expectations. Then illustrate the effect of an increase in the interest rate.
In the diagram sketch an investment demand curve illustrating the relationship between the quantity of investment undertaken and the interest rate.