Answer:
Suppose the economy is experiencing an output gap of –3%
a. Monetary policy or fiscal policy can be used to raise actual output toward potential output when:
The government can increase its spending or reduce taxes, which will shift the IS curve to the right and increase GDP.
The Fed can reduce the interest rate, which will shift the MP curve down and increase GDP.
b. The policies identified in part a,
can be used together to raise actual output toward potential output.
Explanation:
Investment-Savings (IS) curve shows all the levels of interest rates and output (GDP) at which an economy's total desired investment (I) equals its total desired saving (S). This equilibrium can be achieved at a level of interest rate that maximizes output. The IS curve slopes downward, and to the right because at a lower interest rate, investment is higher, which produces more total output (GDP) for the economy.
Answer:
2. in the short run, as aggregate demand increases, unemployment is reduced.
Explanation:
The government misjudging the natural rate of unemployment to be much lower than it actually is, and thus undertaking expansionary fiscal and monetary policies to try to achieve the lower rate. These policies might at first succeed because in the short run, as aggregate demand increases, unemployment is reduced due to the expansionary policies.
Answer:
-3.41%
Explanation:
The computation of the annual rate of return is shown below;
We use the formula:
Future value = Present value × (1 + rate of interest)^number of years
$10,710,500 = $12,738,500 × (1 + rate of interest)^5
($10,710,500 ÷ $12,738,500)^(1 ÷ 5) = (1 + rate of interest)
(1 + rate of interest) = 0.965913622
r = (0.965913622 - 1) × 100
= -3.41%
Answer:
b) false
Explanation:
tell me if I'm wrong. mark me brainliest if this helps :)
