1.Country A is experiencing a recessionary gap. Draw a correctly labeled AD-AS model showing this. Label the recessionary equilibrium price level as PL and current output as Y. Draw the corresponding long-run and short-run Phillips curves. Label the current short-run equilibrium as point A. According to monetarists, in the long run, this economy will self-correct. According to monetarists, what will shift, and in which direction will it shift? Explain why this shift would occur. Show the effect of this on your original Phillips curve. Keynesian economists would advise: Monetary or fiscal policy? Identify the appropriate tools for this recessionary gap. Draw what would happen on your original AD-AS diagram after these tools were implemented. Let's say the central bank of Country A decides to buy bonds. Do interest rates increase, decrease, or stay the same? How is the exchange rate for Country A's currency affected: appreciate, depreciate, or stay the same? Upload 2. Bank XYZ has the following bank balance sheet: Assets Liabilities Total Reserves $150,000 Demand deposits $100,000 Required reserves $10,000 Savings deposits $50,000 Excess reserves $140,000 What is the reserve requirement ratio set at? John deposits $1,000 in a demand deposit account and $500 in a savings deposit account. What is the new required reserves balance? What is the new excess reserves balance? Complete the following: Calculate the change in the money supply as a result of John's deposits. Is this an increase or decrease in the money supply? As a result of your answer in part "c", explain how will this affect aggregate demand in the short run? Upload 3. Country A and Country B can produce two goods, cans of soda pop and baseball bats. Country A can produce 200 cans of soda pop or 100 baseball bats. Country B can produce 300 cans of soda pop or 50 baseball bats. Which country should produce baseball bats? Explain. The countries decide to specialize and trade one can of soda pop for one baseball bat. Does Country A benefit from this terms of trade? Explain. Does Country B benefit from this terms of trade? Explain. Complete the following: Show Country A experiencing economic growth, using a production possibilities curve. Use cans of soda pop and baseball bats as the goods. Explain the factors that cause economic growth and a shift of the PPC. Label a productively efficient point, after the economic growth, on your diagram as Point A. 4. The interest rate in the United States increases in relation to the interest rate in Mexico. What happens to the USD exchange rate and the United States' aggregate demand (AD)? Group of answer choices The USD appreciates, and the AD increases. The USD depreciates, and the AD increases. The USD depreciates, and the AD decreases. The USD appreciates, and the AD decreases. The USD depreciates, and the AD is indeterminate. 5. The interest rate in Germany increases relative to the interest rate in the United States. What happens to the exchange rates of the currencies? Germans use the euro and the U.S. uses the USD. Group of answer choices The euro and the USD appreciate. The euro depreciates; the USD is unaffected. The euro appreciates; the USD depreciates. The euro and the USD depreciate. The euro depreciates; the USD appreciates. 6. The French and Canadians are trading partners. When Canadians increase their travel to France, how will this affect their currencies? The French use the euro and the Canadians use the CAD as currency. Group of answer choices There will be an increase in demand for the euro, so it will depreciate. There will be an increase in the supply of CAD, so it will appreciate. There will be an increase in demand for the euro, so it will appreciate. There will be an increase in demand for the CAD, so it will appreciate. There will be a decrease in demand for the euro, so it will appreciate. There will be a decrease in the supply of CAD, so it will depreciate. There will be an increase in demand for the euro, so it will appreciate. There will be an increase in the supply of CAD, so it will depreciate. There will be a decrease in demand for the euro, so it will depreciate. There will be a decrease in the supply of CAD, so it will appreciate. 7. Americans and Canadians are trading partners. When Americans experience an increase in incomes relative to Canadians, how will the exchange rates be affected? Americans use the USD and Canadians use the CAD as currency. Group of answer choices The USD will appreciate, and the CAD will appreciate. The USD will remain unchanged, and the CAD will appreciate. The USD will depreciate, and the CAD will appreciate. The USD will appreciate, and the CAD will depreciate. The USD will depreciate, and the CAD will depreciate. 8. Country A has a balance of $500,000 in its current account, $100,000 in its capital account, and $500,000 in its financial account. If workers from India sent $300,000 back to their families in India while residents in the United States bought $600,000 worth of goods from abroad in the same year, how do these transactions affect the Balance of Payment Accounts? Group of answer choices The current account has a deficit balance of negative $400,000. The current account has a surplus balance of $400,000. The current account has a deficit balance of negative $100,000, and the financial account has a surplus of $800,000. The current account has a surplus of $1,400,000. The current account has a deficit balance of negative $200,000, and the capital account has a surplus of $400,000. 9. When the central bank is targeting an increased interest rate, the tools used will be _________. Group of answer choices Increase the reserve requirement ratio, decrease the discount rate, and sell bonds Decrease the reserve requirement ratio, decrease the discount rate, and buy bonds Decrease the reserve requirement ratio, decrease the discount rate, and buy bonds Increase the reserve requirement ratio, decrease the discount rate, and buy bonds Increase the reserve requirement ratio, increase the discount rate, and sell bonds 10. When the central bank sells bonds from Bank ABC, how will this affect interest rates and bond prices in the open market? Group of answer choices Interest rates decrease; bond prices increase. Interest rates decrease; bond prices remain unchanged. Interest rates increase; bond prices increase. Interest rates decrease; bond prices decrease. Interest rates increase; bond prices decrease 11. A country is experiencing a recessionary gap. The government increases spending but does not increase taxes in order to increase AD. The government also borrows to pay for its increase in spending. What might occur? Group of answer choices Crowding out, as net exports decrease and AD decreases Crowding out, as consumer and investment spending decrease due to an increase in interest rates and AD decreases Crowding out, as consumer and investment spending decrease due to an increase in interest rates and AD increases Crowding out, as consumer and investment spending increase due to a decrease in interest rates and AD decreases Crowding out, as consumer and investment spending increase due to a decrease in interest rates and AD increases 12. Daniel wants to borrow $40,000 from Bank XYZ. Bank XYZ only has $20,000 in their vault. How does Bank XYZ get cash to lend to Daniel? Group of answer choices Bank XYZ borrows from another commercial bank and pays the discount rate. Bank XYZ borrows from the Federal Reserve Bank and pays the federal funds rate. Bank XYZ borrows from its required reserves and pays the discount rate. Bank XYZ borrows from the Federal Reserve Bank and pays the discount rate. Bank XYZ borrows from its required reserves and pays the federal funds rate 13. Bank ABC receives a demand deposit of $5,000 and a savings deposit of $1,000. The reserve requirement ratio is 8%. How does this change the reserves in Bank ABC's balance sheet? Group of answer choices Excess reserves increase by $480; total reserves increase by $5,000. Required reserves increase by $5,000; excess reserves increase by $800. Required reserves increase by $480; excess reserves increase by $5,520. Total reserves increase by $6,000; excess reserves increase by $800. Total reserves increase by $6, 14. Country A can make 200 bouncy balls or 50 tires in one week. Country B can make 300 bouncy balls or 100 tires in one week. Which of the following statements is true? Group of answer choices Country A has the absolute advantage in producing bouncy balls, and Country B has the absolute advantage in producing tires. Country A has the comparative advantage in producing tires, and Country B has the comparative advantage in producing bouncy balls. Neither country has a comparative advantage. Country A has the comparative advantage in producing bouncy balls, and Country B has the absolute advantage in producing bouncy balls. Country A has the absolute advantage in producing both bouncy balls and tires. 15. Country A can make 250 donuts or 50 bicycles in one week. Country B can make 300 donuts or 100 bicycles in one week. What would be an acceptable terms of trade for these two countries? Group of answer choices 1 donut for 4 bicycles They should not trade. 1 bicycle for 1 donut One bicycle for donut 1 donut for bicycle PLEASE HELP AND ANSWER ALL !! ESPECIALLY THE TOP THREE THEY ARE INCREDIBLY IMPORTANT !!! THANK YOU SO MUCH !! also a timed test it would help if done quickly but if not oh well i can submit it late !! thank you again i really appreciate it