Which of the following properties of a commodity are related to is function as a medium of exchange a) Durability b) Unit of Account c) Homogeneity. d) None of the options is correct.
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Which of the following properties of a commodity are related to is function as a medium of exchange
a) Durability
b) Unit of Account
c) Homogeneity.
d) None of the options is correct.
If an economy is at full employment it must be the case that
a) an increase of the money supply generates a deflationary process in the long run, while a reduction of the money supply brings along an increase in
b) an increase of the money supply generates an inflationary process in the long run, while a reduction of the money supply brings along an increase in GDP in the short run.
c) an increase of the money supply generates a deflationary process in the long run, while a reduction of the money supply brings along a drop in the GDP of the economy in the short run.
d) an increase of the money supply generates an inflationary process in the long run, while a reduction of the money supply brings along a drop in the GDP of the economy in the short run.
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- A country has 4 million units of goods and services within itself. While these goods and services remain constant, the government printed money and increased the amount of money in circulation from 10 million units to 12 million units. Under these conditions: a) Calculate the amount of increase in prices. b) Calculate the rate of decrease in the purchasing power of moneySimilar to how the quantity demanded for a good depends on its price, the quantity of money demanded depends on the cost of holding money, or the nominal interest rate (i). In addition to this, the demand for real money balances is also a function of income (Y). Using all of this information, suppose the demand for real money balances takes on the following functional form: (M/P)dd=500 + 2Y – 9i The Fisher equation relates the nominal interest rate to the real interest rate (r) and the expected rate of inflation (Eπ) when examining ex-ante (based on forecasts or 'before the event') effects. The equation ( (M/P)dd = 500 + 2Y – 9(Eπ – r)/(M/P)dd = 500 + 2Y – 9(r – Eπ) / (M/P)dd = 500 + 2Y + 9(r + Eπ) / (M/P)dd = 500 + 2Y – 9(r + Eπ) ) is equivalent to the function given for the demand for real money balances. Suppose the central bank announces that it will increase the money supply in the future, but it does not change the money supply today. Complete the following…1) Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (Qg = 75 and Qs = 300) and that the demands for gold and silver are given by the following equations: PG = 975 – QG + 0.5Ps and Ps = 600 – Qs + 0.5PG. What are the equilibrium prices of gold and silver?
- An IS curve shows: (a) that realized savings are most likely a function of interest rates, because changes in interest rates result in changes in precautionary demand for money; (b) the combinations of investments and incomes that result in the supply and demand for money being equal to one another; (c) the locus of all combinations of interest rates and incomes that will result in realized investment and realized savings being equal to one another; (d) that increases in output typically are caused by increases in interest rates.The supply of credit cards is given by q = 1400X, where X are real credit card balances, q isthe real price of the credit card balance. You also know that R = 0.05 (nominal interest rate)and P = 100. Answer the following questions about this:(a) If the money supply is M s= $5, 000, if P = 100 is the equilibrium price level, find Y (realoutput).(b) Suppose that the Federal Reserve Bank decides to increase the money supply by 10%.How much is the inflation rate as a result? Explain and justify your answer. (c) Further suppose that at the same time, real output, Y , increases by 10%. Now what isthe inflation rate? Does our quantity theory of money hold here? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.6) The short-run aggregate supply curve (AS) is upward sloping because: A) an increase in output causes an increase in employment, a reduction in unemployment, an increase in the nominal wage and an increase in the price level. B) a reduction in the aggregate price level causes a reduction in nominal money demand and a reduction in the interest rate. C) a reduction in the aggregate price level (P) will cause a reduction in the interest rate and an increase in output. D) an increase in the aggregate price level will cause an increase in the interest rate and a reduction in output. E) an increase in the nominal wage causes a reduction in the amount of output that firms are willing to produce.
- Task 3 Consider a closed economy where the goods and money markets are described by the following relationships: C = 200 + 0.9(Y – T) I = 400 – 15r M = 200 + Y – 100r P G = 150 T = 100 M = 2000 P = 2 Where Cis planned consumption, / is planned investment spending, Tis government tax revenues, G is government purchases, M is the money supply, P is the price level and r is the interest rate. a) Derive the two expressions for the IS and LM equilibrium relationships respectively. Sketch a graph of the two relationships. b) Calculate the equilibrium value of output Y and interest rate r (round off your answers to one decimal point). Compute also the level of consumption and investment spending in equilibrium and check whether the actual level of spending matches the equilibrium level of output. c) The government reduces taxation to T=50 in order to boost economic activity. Assume no changes in the values of all the other variables. 1. What is the immediate increase in income before the…(1) Suppose the economy is in long-run equilibrium. If there is a sharp increase in the expected price level, what do we expect to happen? Select one: (A) In the short run, the SRAS curve will shift left, real GDP and price will fall. (B) In the short run, SRAS will shift right, real GDP will rise and prices will fall. (C) In the short run, AD will shift left, real GDP and prices will fall. (D) In the short run, LRAS and SRAS will shift left, causing real GDP to fall.Suppose gold (G) and silver (S) are substitutes for each other because both serve as hedges against inflation. Suppose also that the supplies of both are fixed in the short run (Qe = 90 and Qg = 300) and that the demands for gold and silver are given by the following equations: PG = 990 - Qg +0.50PS and Ps = 630 - Qg +0.50PG- What the the equilibrium prices of gold and silver? The equilibrium price of gold is $ and the equlibrium price of siliver is $. (Enter your responses rounded to two decimal places.)
- The commodity and money markets for an economy are defined by the following equations: Commodity Market C = 640 + 0.8Yd I = 80 – 80r G = 160 T = 100 Money Market Ma = 50 + 0.8Y – r M; = 80 i) Derive the IS and LM curve ii) Compute the equilibrium values of Y and r in this economyThe problem I am trying to answer is how has it affected the responsiveness of Canadian maple syrup supply changes in US prices. In regards what is the price of maple syrup in CAD before and after the change in the value of the Canadian dollar. I have attached the first part of the question that I have answered already but need to check my answer on this one as it is hard to understand. I got a new supply curve and added it to my graph as well but do not understand this part.The economy of Andorra is currently experiencing unemployment rates of 5% while economic growth is stagnating at 2%. Naomi recently lost her job as a systems analyst and is struggling to find new employment in the current economic conditions.The ResultsAs the money supply (increases/decreases), businesses will get (more/less) money and will (hire/fire) workers so that unemployment (increases/decreases).When that happens Naomi will earn (more/less) money and will be able to spend (more/less) so that the economy and GDP will (expand/contract) and prices will (rise/fall) .
