1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
BlackZzzverrR [31]
4 years ago
10

Fed could change its inflation target temporarily to offset the effect of an aggregate demand shock (a-bar). In this problem, yo

u can calculate by how much. Suppose that the economy starts in the steady state in 2021 with pi-bar = 2%, b-bar = 1/2, m-bar = 1/2, and v-bar= 1/2. An AD shock equal to a-bar = 2% occurs in 2021.
a. Using the simple monetary policy rule, show by how much inflation and short-run output change in 2021 if the Fed keeps its target inflation equal to 2%. Calculate inflation and short-run output for 2022 and 2023.

b. Use an AD/AS diagram to show how a decrease in the inflation target can keep inflation and short-run output from starting to rise in 2021. Explain your diagram and what it reveals about monetary policy.
c. Calculate how much the Fed needs to lower its inflation target pi-bar below 2% to keep inflation and short-run output from rising.
d. Suppose the Fed adopts a Taylor rule. Show how adding a term nY (n-bar Y-bar) to the simple monetary policy rule changes the shift in the AD curve following an aggregate demand shock a-bar n the AD equation. Using the parameter values for this question, calculate the value of n-bar for the Fed that keeps inflation and short-run output from rising.
Business
1 answer:
larisa [96]4 years ago
7 0

Answer:

b. Use an AD/AS diagram to show how a decrease in the inflation target can keep inflation and short-run output from starting to rise in 2021. Explain your diagram and what it reveals about monetary policy.

You might be interested in
On January 1, Year 1, Stratton Company borrowed $100,000 on a 10-year, 7% installment note payable. The terms of the note requir
makvit [3.9K]

Answer:

<em>Computation of the interest expense using the equation as shown below: </em>

Interest expense for year 1 = Notes payable * Interest rate

= $100,000 * 10%

= $7,000

​

Notes payable reduction in Year 1 = $14,238 - $7,000

= $7,238

                    General journal entry

Item                           Debit         Credit

<em>Notes payable          $7,745</em>

Interest expense       $6,493

Cash                                            $14,238

Workings

Interest expense = ($100,000 - $7,238) * 7%

= $92,762 * 7%

=$6,493

3 0
3 years ago
Is the transition of Jews and Irish from the non-White to White category surprising to you? Brodkin also discusses the transform
sasho [114]

Answer:

Additional changes in race within the US Census Categorization include American Indians, Aleut and Eskimo, Asian Indians, Part Hawaiian/Samoan/Guamanian and the Mexicans.

Explanation:

1. American Indians were not identified as such until 1860, when the racial category of “Indian” was added. Beginning in 1890, the census included a complete count of American Indians on tribal land and reservations.

2. In 1960, categories for Aleut and Eskimo were added in Alaska only. Since 2000, the category has grouped both of these together as “American Indian or Alaska Native,” and the census form provides a blank space to specify a tribe.

3. Asian Indians were called “Hindus” on the census form from 1920 to 1940, regardless of religion. Beginning in 2000, people could select from among six different Asian groups in addition to “Other Asian,” with the option to write in a specific group.  

4. The categories of Hawaiian, Part Hawaiian, Samoan and Guamanian were added and counted with the totals for the Asian population. Beginning in 2000, based on research conducted by the Census Bureau and new Office of Management and Budget guidelines, Native Hawaiian, Samoan and Guamanian became part of a new category: Pacific Islander.  

5. Mexicans were counted as their own race in 1930 for the first and only time. Hispanic groups of any kind were not offered as options again until 40 years later, when the census form began asking about Hispanic origin as a separate question from race.

7 0
3 years ago
Which of the following is an advantage of a sole proprietorship?
FromTheMoon [43]
B.  Sole proprietorships are not very highly regulated, so they are easy to get started.   Most forms of business are easy to expand if they succeed!  Getting financing really depends on how likely the lenders think the business is to succeed, irrespective of format.  The owner is directly liable for the debts of a sole proprietorship, but even if you incorporate, the bank is likely to want a personal guarantee of the owner for any debt of a new corporation, so it's pretty much the same deal.   Taxes could be higher or lower, depending on how the business does and what other sources of income the proprietor has (like their day job!)
7 0
4 years ago
Which type of credit card carries the most risk?. . A. Secured with fixed interest rate. . B.Secured with variable interest rate
Kay [80]
The type of credit card that carries the most risk depends you are an individual or an institution. For an individual it is much riskier with letter B, secured with variable interest rate. For an institution it is much riskier with letter D, unsecured with variable interest rate
3 0
3 years ago
Over a particular period, an asset had an average return of 11.0 percent and a standard deviation of 19.8 percent. What range of
vodomira [7]

Answer:

-28.6% to 50.6%

Explanation:

The computation of the range of returns is shown below:-

95% Range of Return = Average Return - 2 × Standard Deviation, Average Return + 2 × Standard Deviation

= 11.0% - 2 × 19.8%, 11.0% + 2 × 19.8%

95% Range of Return = -28.6%, 50.6%

The Expected range of returns is

= -28.6% to 50.6%

Therefore for computing the expected range of returns we simply applied the above formula.

8 0
3 years ago
Other questions:
  • A humane society reports that 19% of all pet dogs were adopted from an animal shelter.Assuming the truth of this assertion, find
    15·1 answer
  • Julie ling worked as a customer service representative in the billing department of novell, inc. when questions arose about ling
    9·1 answer
  • The _______ states that more of an item will be purchased at a lower price than at a higher price.
    12·1 answer
  • You start your own business on 1/1/2015. during the year 2015, your sales revenues are $200,000. you pay your assistant $50,000
    14·1 answer
  • Krizun Industries makes heavy construction equipment. The standard for a particular crane calls for 14 direct labor-hours at $16
    6·1 answer
  • Where does the email address of the recipient go?​
    10·2 answers
  • If a bank experiences a deposit outflow of​ $50 million with a required reserve ratio on deposits of​ 10%, which balance sheetLO
    5·1 answer
  • What is the effect of the interaction of buyers and sellers on a market?
    12·1 answer
  • Yoxyju128 Corporation has a cash balance of $11,100 on May 1. The company must maintain a minimum cash balance of $9,000. During
    6·1 answer
  • The main risk in a strategic alliance is that? a. critical employees will be hired away by the strategic partne
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!