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Congratulations! You have been appointed an economic policy adviser to the United States. You are told that the economy is significantly above full-emplyoment GDP. Based
Congratulations! You have been appointed an economic policy adviser to the United States. You are told that the economy is significantly above full-emplyoment GDP. Based on this Information, how can the economy would adjust to reach LR-SR equilibrium (Classical View)? The economy will experience low unemployment rate, pushing wages up, and increasing the prices of a key input (labor), shifting the SAS to the left (up) The economy will experience high unemployment rate, pushing wages down, and reducing the prices of a key input (labor), shifting the SAS to the right (down) The economy will experience low unemployment rate, decreasing income, which will eventually shift the AD to the left. The economy will experience low unemployment rate, pushing wages up, and increasing the prices of a key input (labor), shifting the SAS to the right (down).If the euro depreciates against the US$, it becomes: O cheaper for Americans to buy European products but more expensive for Europeans to buy American products. O cheaper for Americans to buy European products and cheaper for Europeans to buy American products. O more expensive for Americans to buy European products and more expensive for Europeans to buy American products. O' more expensive for Americans to buy European products but cheaper for Europeans to buy American products.Congratulations! You have been appointed an economic policy adviser to the United States, You are told that the economy is significantly below its potential output and that the following will happen in the next two months. The confidence consumer index, an index that measures the consuption of durable goods, will drop by 20%. At the same time, the government will set tanills of 50%% to steel and copper, increasing the costs of numerous manufacturing processes. After these two events, this economy is experiencing: O a recessionary gap or an inflationary gap. 0 a recessionary gap. O SR-LR equilibrium. an inflationary gapDuring the 2005, actual output in the U.S. appears to have exceeded potential output. Under these circumstances, we would eventually expect O a shortage of key inputs, increasing the prices of such input, causing the SAS curve to shift to the left. O a surplus of key inputs, decreasing the prices of such input, causing the SAS curve to shift to the left. O a shortage of key inputs, increasing the prices of such input, causing the LAS curve to shift to the left. O a shortage of key inputs, increasing the prices of such input, causing the SAS curve to shift to the rightCongratulations! You have been appointed an economic policy adviser to the United States. You are told that the economy is significantly below its potential output and that the following will happen in the next two months, The confidence consumer index, an index that measures the consuption of durable goods, will drop by 20% At the same time, the government will set tariffs of 50% to steel and copper, increasing the costs of numerous manufacturing processes. Based on this information, what would be the appropriate monetary policy to bring this economy back to SR-LR equilibrium? (@ OMO-increasing money supply and banks' reserves--reducing interest rates--reducing C and I- decreasing AD and GDP @) Discount rate-. decreasing money supply and banks' reserves-+reducing interest rates-reducing C and I-. Increasing AD and GDP OMO-+ decreasing government expenditure .increasing interest rates-Increasing C and I-. decreasing AD and GDP (:OMD-Increasing money supply and banks' reserves-reducing interest rates .Increasing G and I-. Increasing AD and GDP
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