Some economists argue that the animal spirits of investors are so important in determining the level of

Question:

Some economists argue that the €œanimal spirits€ of investors are so important in determining the level of investment in the economy that interest rates do not matter at all. Suppose that this were true, that investment in no way depends on interest rates.

a. How would Figure 11.4 be different?

P and Z do not shift the r=0 line Binding Situation IS Y* Aggregate output (income), Y Internet rate, r

b. What would happen to the level of planned aggregate expenditure if the interest rate changed?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Principles of Macroeconomics

ISBN: 978-0134078809

12th edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

See More Books

Question Posted: Dec 27, 2018 07:20 AM

See More Questions

Some economists argue that private firms will not undertake the efficient amount of basic scientific research. a. Explain why this might be so. In your answer, classify basic research in one of the...
In the All About You feature, you learned that there are on-line investment services that provide advice to investors. These services offer stock quotes, company research reports, personal finance...
Community Care Services (CCS) is a not-for-profit organization formed in January 2013 and is located in the rural community of Thomas County. CCS is dedicated to serving the needs of seniors. CCSs...
Consider the Cobb-Douglas production function f(x, y) = 300x0.85, 0.15 When x = 4000 and y = 800, find the following. (Round your answers to two decimal places.) (a) the marginal productivity of...
Kenneth Wheeler was angry at certain police officers in Grand Junction, Colorado, because of a driving-under-the-influence arrest that he viewed as unjust. While in Italy, Wheeler posted a statement...
The accompanying table shows a portion of the 30 companies that comprise the Dow Jones Industrial Average (DJIA); the full data set can be found on the text website and is labeled...
6. Interest rate swaps were used in the chapter to highlight the differences between fair-value and cash-flow hedge accounting. Explain what type of risk is being hedged when a receive-fixed,...
Likewise, effective strategic leadership requires a thorough knowledge of the organization that youre trying to lead, including its strengths and weaknesses. What appear to be the organizational...
deluxe hotels report a revenues of 570,000 for the year and then December 31, 2019 accounts receivable at December 31, 2018 and 2019 or 67,040 7000 if the Lex uses the direct method of reporting...
Suppose the hypothetical processor of Figure 1.3 also has two I/O instructions: 0011 = Load AC from I/O 0111 = Store AC to I/O In these cases, the 12-bit address identifies a particular external...
In problem, find the center and radius of each circle. Write the standard form of the equation.. (1, 2) (1, 0)
Two separate capacity constraints are discussed in this chapter: (1) the actual physical capacity of existing plants and equipment, shown as the vertical portion of the short-run AS curve, and (2)...
If possible, find (a) A + B (b) A - B (c) 4A (d) 2A + 2B 1. 2. 10] [2 5. - 3 12 B = [3 8. 4 3 3 11 A B = | 15 25 -6 1 10 29 20
Could I obtain assistance with these . problems? 1. Find the coordinates of the turning points of the curve y=3x^4-8x^3-30x^2+72x+5. Determine the nature of these points. "Determine the nature"...
1 . In 1 9 6 0 the homeownership rate in the United States was 6 2 % . Is there evidence to indicate that the homeownership rate is now higher? To answer the question, the researchers sample 5 0 2...
A certain disease is classified into 4 stages that distinguish how developed the disease is. Researchers studying a new potential treatment recruited over 100 patients with varying stages of the...
1. (20) Let and Dor {abnm or 2n m} = Dand = {a"b" nm and 2n m}. Prove that Dor and Dand are both context-free.
Given n samples 1 , 2 , . . . , x 1 ,x 2 ,...,x N drawn independently from a Poisson distribution unknown parameter , find the MLE of . = = 1 MLE = i=1 n x i = = 1 MLE =n i=1 n x i = = 1 MLE = i=1 n...
What is real business cycle theory?
(a) Bright Sdn Bhd (BSB) is a tax resident manufacturing company in Johor, which involves in ceramic tiles. Currently, BSBs annual sales turnover has been forecasted to be around RM 300,000 for the...
Great Britain and the United States produce cheddar cheese and blue cheese. Current domestic prices per pound for each type of cheese are given in the following table: Suppose the exchange rate is...
In 2015, the United States and Cuba re-established diplomatic relations, reopening embassies in each others capitals for the first time since 1961. Since the early 1960s, the United States has had an...
The nation of Pixley has an absolute advantage in everything it produces compared to the nation of Hooterville. Could these two nations still benefit by trading with each other? Explain.
why should Undertake research to review reasons for previous profit or loss?
A pension fund's liabilities has a PV01 of $200 million. The plan has $100 billion of assets with a weighted average modified duration of 8. The highest duration bond that the plan can invest in has...
Metlock Limited has signed a lease agreement with Lantus Corp. to lease equipment with an expected lifespan of eight years, no estimated salvage value, and a cost to Lantus, the lessor of $170,000....

Some economists argue that the animal spirits of investors are so important in determining the level of

Question:

P and Z do not shift the r=0 line Binding Situation IS Y* Aggregate output (income), Y Internet rate, r

Step by Step Answer:

a If investment depended in no way on interest rates planned investment in Fig...View the full answer

Principles of Macroeconomics

Students also viewed these Business questions