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Why will only the price level and money wages be affected by a change in the money supply in the fullemployment economy?
Why do reserves fall if the Fed engages in an open market sale? Why do they rise if the Fed engages in an open market purchase?
Why do borrowed reserves fall if the Fed raises the discount rate? Why do they rise if the federal funds rate increases?
Why do nonborrowed reserves fall if the Fed engages in an open market sale? Why do they rise if the Fed engages in an open market purchase?
Has the FOMC raised or lowered interest rates at these meetings? What reasons do the press releases give for these actions?
What are the consequences for the output gap in the short run of the policy shift that results? What are the consequences for the output gap in the long run?
Explain how the adjustment of inflation works to return the output gap to zero. What happens to the real interest rate?
How does this affect the ADI curve? What happens in the short run to equilibrium output? To unemployment? Over time, will inflation tend to rise or to fall?
What is the effect on consumption of a $1 change in total income? What is the effect on saving of a $1 change in total income?
If the government made it easier for people to borrow money. How is the marginal propensity to consume affected? How is the multiplier affected?
what does this imply about what has happened to the consumption function? What will be the consequences for the equilibrium level of output?
What determines the slope of the aggregate expenditures schedule? What is the equilibrium output?
How is the multiplier affected by the marginal propensity to consume? By the marginal tax rate? By the marginal propensity to import?
Explain how the equilibrium level of output is determined. Why are points on the aggregate expenditures schedule above the 45-degree line not sustainable?
What has been the average length of recessions since 1854? Since 1945? What has been the average length of expansions since 1854? Since 1945?
What the deficit would have been, had the government not inherited any debt. Discuss why the concept of a primary deficit may or may not be useful or relevant.
What will be the impact of this change on the equilibrium real rate of interest and the level of saving and investment.
Discuss the effect on employment, output, the real rate of interest, investment, and saving if households become more optimistic.
Trace through how the effects of a change in one market-such as an increase in the supply of labor- have effects on other markets.
Show the effect on the short-run production function and the full-employment level of output.
Show the equilibrium in the labor market. What happens to real wages, employment, GDP, and saving if the labor supply function shifts to the right?
How are leakages and injections balanced? Why will demand and supply in the product market be equal if leakages and injections are equal?
What is the name of the committee that sets monetary policy for the United States? Who are the members of this committee?
If U.S. investments increase and world interest rates rise, what is the effect on private investment in other countries? What is effect on U.S. national saving?
What would be the value of its exports? How does the answer change if, instead of borrowing, the nation lent $100 billion abroad?