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BlackZzzverrR [31]
3 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]3 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.

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Exercise 2-15 Computing net income LO A1 A corporation had the following assets and liabilities at the beginning and end of this
Ipatiy [6.2K]

Answer:

a. $32,039

b. $19,439

c. -$12,961

d. $9,639

Explanation:

We will use accounting equation to solve the above question.

Assets = Liabilities + Equity

Also;

Net income will be the difference in equity plus dividends minus contributions

= [Ending equity - Beginning equity ] + Dividends

Since the beginning and ending equity is the same for all the years, then we'll have

$71,500 = $30,652 + Equity

Equity = $40,848

Ending equity = $122,500 - $49,613

= $72,887

a. Income : $72,887 - $40,848 + 0 - 0

= $32,039

b. $72,887 - $40,848 + $1,050 × 12 - 0

= $19,439

c. $72,887 - $40,848 + 0 - $45,000

= -12,961

d. $72,887 - $40,848 + $1,050 × 12 - $35,000

= $32,039 + $12,600 - $35,000

= $9,639

6 0
3 years ago
Tuity fruity beverage​ company's operating activities for the year are listed below. purchases ​$140 comma 500 operating expense
Greeley [361]

Answer:

$135,100

Explanation:

Given :

Cost of purchasing: $140,500

Operating expenses :$80,600

beginning inventory:$12,900

Ending inventory:$18,300

sales revenue :$300,700

Gross profit of the year can be determined by

Cost of purchasing + beginning inventory - Ending inventory

=140,500 + 12,900 -18,300

=$153,400-$18,300

=$135,100

8 0
3 years ago
2. At which inventory level is operations management considered to be doing an excellent job? A. Above the minimum level B. Abso
BigorU [14]
I would say D. because that is what they want
4 0
3 years ago
Smith Company reported pretax book income of $400,000. Included in the computation were favorable temporary differences of $50,0
Hoochie [10]

Answer:

$10,200

Explanation:

The computation of the deferred income tax expense or benefit is shown below:

Favorable temporary difference = $50,000

Less:  Unfavorable temporary difference -$20,000

Net favorable temporary difference $30,000

We assume the tax rate is of 34%

So, the deferred tax expense is

= $30,000 × 34%

= $10,200

By finding out the net favorable temporary difference and then multiplied with the tax rate we can get the deferred tax expense and the same is shown above

3 0
2 years ago
Chicago Company has a subsidiary in Germany where it generates large profits. The subsidiary remits most of its earnings to the
matrenka [14]

Answer:instructing the German subsidiary to borrow euros from a bank in Germany

Explanation:A company may organize subsidiaries to keep its brand identities separate. This allows each brand to maintain its established goodwill with customers and vendor relationships. Subsidiaries can also help you position part of your business as an alternative to the parent company at a different price point.

The Chicago Company will instruct the German subsidiary to lend Euro from bank in Germany.

6 0
3 years ago
Read 2 more answers
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