Question
1. When real GDP increased in the first quarter of 2017, businesses accumulated $12.2 billion in inventories, following a decrease of $2.8 billion in the
1. When real GDP increased in the first quarter of 2017, businesses accumulated $12.2 billion in inventories, following a decrease of $2.8 billion in the previous quarter. Question:
How a fall in business inventories influences aggregate demand
2. How a rise in household financial assets would be expected to influence consumption expenditure and saving and how the consumption function and the saving function would change? Please explain with graphs
And also, include stock and bonds concept
3. Why induced consumption expenditure differs from autonomous consumption expenditure. Why isn't all consumption expenditure induced expenditure? 4.
Compare and contrast the key beliefs and recommended policies of Classical macroeconomists and Keynesian macroeconomists.
5.
The People's Bank of China announced it will cut the required reserve ratio for five big banks."
Explain whether this is a contractionary or expansionary policy. Then explain using the MS-MD curve what impact it will have on the amount of money in the economy and the short-term interest rates.
Describe the channels with proper graphs by which this policy ripples through the economy and explain how each channel operates in the short run and long run to determine the interest rates, consumption, investment, trade balance, real GDP and price level. Use SLF-DLF and AS-AD curves
please explain in detail thank you!
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