Question list 0 Question 5 0 Question 6 0 Question 7 0 Question 8 0 Question 9 0 Question 10 0 Question 11 I The graph shows the aggregate supply curve and the aggregate demand curve for an economy. Draw an aggregate demand curve that shows the effect of a $100 billion decrease in government expenditure and a $100 billion decrease in taxes occurring simultaneously. Label it AD1. E> What is the value of the balanced budget multiplier? The balanced budget multiplier C) A. is sometimes a positive number and sometimes a negative number, depending on whether the government budget is in surplus or decit (:3 B. is a negative number (:3 C. is a positive number C) D. equals zero Price level (GDP price index, 2012:100) 500 600 700 800 900100011001200130014 Real GDP (billions of 2012 dollars) >>> Draw on y the objects specied in the question. The graph shows the economy of Freezone. Price level (GDP price index, 2012 = 100) Question list K Potential GDP is $300 billion. 150- Potential GDP What happens in Freezone if the central bank conducts an open market sale of 140- securities? How will the interest rate change? O Question 7 130- Do you recommend that the central bank AS 120- O Question 8 110 If the central bank of Freezone conducts an 110- open market sale of securities, interest rates O Question 9 and aggregate demand 100- AD O A. fall; increases 400 O B. rise; increases 90- 0 100 200 300 400 O Question 10 500 600 O C. rise; decreases Real GDP (billions of 2012 dollars) O D. fall; decreases O Question 11 This action recommended because it O Question 12 O A. is not; moves the economy further away from potential GDF O B. is not; increases the inflationary gap O Question 13 O C. is; moves the economy toward potential GDP O D. is; decreases the recessionary gap O Question 14 Question 15The economy has slipped into recession and the Fed takes actions to lessen its severity. In the left graph, draw a curve that shows the change that the Fed makes to either the demand for money or the supply of money. Label it. Draw a point to show the new equilibrium quantity of money and interest rate. Show the effect in the right graph. Draw eithera new SLF curve or DLF curve. Label it. Draw a point to show the new equilibrium quantity of loanable funds and interest rate. >>> Draw only the objects specified in the question. Interest rate (percent per year) Q Real interest rate (percent per year) Q 8.0 8.0 s Q Q 7.0 7.0 8' Vi 6.0 606-9 5.0 5.0 4.0 4.0 MD 3.0 3.0 2.0 3.0 20 1.0 2.8 2.9 3.0 3.1 3.2 0.? 0.8 0.9 1.0 1.1 1.2 1.3 1.4 Real money (trillions of 2012 dollars) Loanable funds (trillions of 2012 dollars)