Question
Determine weather the following statements are true or false then using graphs and analysis explain your answer. 1- Above the IS curve there is an
Determine weather the following statements are true or false then using graphs and analysis explain your answer. 1- Above the IS curve there is an excess supply of goods and services. 2- The LM curve shows equilibrium in the Money Market. 3- The AD curve is steeper (closer to the vertical) when the IS curve is steeper. 4- The monetary policy is more effective when the LM curve is steeper. 5- The fiscal policy is more effective when the LM curve is steeper. 6- The labor demand curve is the marginal product curve. 7- The labor supply gives the relationship between the expected real wages and the desire of the worker to work. 8- Unemployment is reduced from 14% to 9% when the output ratio increases from 95 to 101. 9- When un employment is larger than natural unemployment, there is a recessionary gap. 10- When expected inflation increases, the LP curve shifts to the right. 11- When the marginal propensity to consume increases, the multiplier increases. 12- When the population growth rate increases the steady state capital labor ratio increases. 13- When the technology factor (A) increases the capital labor ratio increases. 14- Cost push inflation is the result of a supply shock. 15- When the growth rate of nominal GDP = 7% and the inflation rate = 3.5%, then the growth rate in real GDP = 10.5%.
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