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i need the answers asap, thank u 2. Fiscal policy, the money market, and aggregate demand Suppose there is some hypothetical economy in which households
i need the answers asap, thank u
2. Fiscal policy, the money market, and aggregate demand Suppose there is some hypothetical economy in which households spend 50.75 cf each additional deilar they eam and save the 50.25 they have left ower, The following graph plots the cconomy's initial aggregate dimand curve (AD1). Suppose now that the government increases its purchases by $3,75blilion. Use the grown Ahe (triangle symbaif on the following gragh to show the aggregate domang ourve (AD.) atter the multiplior effect takes place. Mint: Bo sure the new aggregate demand curve (AD2) is paraliel to AD2 - Yoo can see the stope of AD1 by seiecting it on the fellowing graph. Show the impoct of the incresse in government purchases on the interest rate by shifting one or both of the curves on the following graph, Suppose that far every increase in the interest rate of one pertentage point, the level of irvestment spending declines by sa.s builon. Based en the changes mede to the money market in the previous scenario, the new interest rate causes the level of investrvent spending a Taking the multinier effect into account, the change in investment spending will cause the quantity of output demanded to at exery price level, The impart of an increase in government purchsses on the interest rate and the loved Suppose that for every increase in the interest rate of one percentage point, the level of investment spending decliaes by 50.5 bumon, Based on the changes made to the money market in the previous scenario, the new interest rate causes the level of investment spending to by Minr affect into account, the change in investment spending will cause the quantify of cutpur demanded to at every price level. The impoct of an increase in government purchases on the intersst rate and the level of investment spending is effect. USe the purple line (diampod symbol) on the groph at the beghning of this problew to show the apgregate domand curve (AD3) after accouncing for the impact of the incresse in government purchases on the incerest rate and the lovel of invostment soending. Hint: Be sure your final appregate demand curve (AD3) is parallel to AD1 and AD2. You can see the slopes of AD1 and AD2 by selecting them cn the greph. Suppose that for every increase in the interest rate of one percentage point, the level of investment spending declines by so.5 buwan. Based on the changes made to the money market in the previous scenario, the new interest rate causes the level of investment spending to Taking the multiplier effect into account, the change in investment spending will cause the quantity of output dermanded to at every price level. The impact of an increase in government purchases on the interest rate and the lev. known is the effect, Use the purple line (dlamond symbol) on the graph at the begining of this problem to show the aggregate demand curve (ADi) after accounting for. the irmpact of the increase in government purchases on the interest rate and the level of investment spending. Hint: Be sure your final aggregate demand curve (AD3) is parallel to AD1 and AD2. you can see the slopes of AD1 and AD2 by seiecting then an the greph: Suppose that for every increase in the interest rate of one percentage point, the level of investment spending declines by so.5 bilion. Based an the changes made to the money market in the previous scenario, the new interest rate causes the level of investment spending to Taking the multiplier effect inte account, the change in investment spending will cause the quantity of output demanded to at every price level. The impact of an increase in government purchases on the interest rate and the level of investment spending is effect. Wine (diamond symbol) on the graph at the beginning of this problem to show the aggregate devnand curve (AD3) after accounting for be increase in government purchases on the interest rate and the level of investment spending. Mint: Be sure your finat aggregate demand curve (AD3) is parallel to AD1 and AD2. You can see the slopes of AD2 and AD2 by selecting them on the greph. Suppose that for every increase in the interest rate of one percentage point, the level of investment spending declines by so.5 bilion, Based on the changes made to the money market in the previous scenario, the new interest rate causes the lavel of investment spending to Taking the multiplier effect into account, the change in investment spending will cause the quantity of output demanded to at every price level. The impact of an increase in government purchases on the interest rate and the level of iavestment spending is knowit as the effect. Use the purpl on the graph ar the beginning of this problem fo show the aggregare demand curve (AD1) anter accounting for the ampact of lent purchases on the interest rafe and the level or investmont spending. Hint:- Fe suri mand curve (AD3 ) is parallel to AD1 and AD2, You can see the slopes of AD1 and AD2 by seiecting them on the groph Step by Step Solution
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