Question DetailsNormal
$ 7.00
ECON 214 Problem set #6 Liberty University Complete Answers
Question posted by
request

ECON 214 Problem set #6 Liberty University Complete Answers

 

The below shown questions is just one version sample.
Download the solution .PDF document for the complete different version solutions and get A grade.

 

Problem set #6

1) Why is it possible to change real economic factors in the short run simply by printing and distributing more money?

2) Explain why a stable 5% inflation rate can be preferable to one that averages 4% but varies between 1-7% regularly.

3) Explain the difference between active and passive monetary policy.

4) Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%, Now assume that the central bank unexpectedly decreases the money supply by 6%.

a. Illustrate the short run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level and the Unemployment Rate. Label all curves and axis for full credit.

5) Suppose the economy is in long-run equilibrium, with real GDP at $16 trillion and the unemployment rate at 5%. Now assume that the central bank increases the money supply by 6%.

a. Illustrate the short-run effects on the macro-economy by using the aggregate supply-aggregate demand model. Be sure to indicate the direction of change in Real GDP, the Price Level, and the Unemployment Rate. Label all curves and axis for full credit.

Available Solution
$ 7.00
ECON 214 Problem set #6 Liberty University Complete Answers
  • This Solution has been Purchased 1 time
  • Submitted On 27 Sep, 2019 02:52:55
Solution posted by
solution
1) Why is it possible to change real economic factors in the short run simply by printing and distributing more money? Answer – By printing and distributing more money in short run will lead to rise in money supply in the economy which will reduce the interest rates in the economy. It is possible to change real economic factors in the short run because of instant changes in the money holdings of people as there are changes in the interest rate and money supply in the economy. The monetary policy lag is smaller under such circumstances. 2) Explain why a stable 5% inflation rate can be preferable to one that averages 4% but varies between 1-7% regul...
Buy now to view full solution.
closebutton

$ 629.35