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How would you describe the profits and losses for changes in asset prices for a leveraged financial institution? O amplifies profits when asset prices increase,
How would you describe the profits and losses for changes in asset prices for a leveraged financial institution? O amplifies profits when asset prices increase, amplifies losses when asset prices decrease O amplifies profits when asset prices increase, mitigates losses when asset prices decrease O mitigates profits when asset prices increase, amplifies losses when asset prices decrease O mitigates profits when asset prices increase, mitigates losses when asset prices decrease2 points For the next five questions, use the IS/MP model with Phillips curve to explain the short-run economic fluctuations from the folowing shock. The economy is producing at potential and the real interest rate is equal to the marginal product of capital, The government increases purchases to stimulate approgate demand to lower unemployment. What would be the effect on the IS curve and short-run output without any change in the interest rate? shift IS curve in to the left, short-run output decreases O shift IS curve in to the left. short-run output increases @ shift IS curve out to the right, short-run output decreases @ shift IS curve out to the right. short-run output increasespoints For the next five questions, use the IS/MP model with Phillips curve to explain the short-run economic fluctuations from the following shock. The economy is producing at potential and the real Interest rate is equal to the marginal product of capital, The is a spike in oil prices around the world as oil producing countries reduce production, What would be the affect on the Phillips curve? movement up along the Phillips curve, inflation is increasing movement down along the Phillips curve, inflation is decreasing () shift up to the left of the Philips curve, inflation is increasing @) shift down to the right of the Phillips curve, inflation is decreasing
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