Question
Offered Price $9.00

Assume the economy is initially in a long-term equilibrium

Question # 00542910
Subject: Economics
Due on: 06/09/2017
Posted On: 06/09/2017 03:05 AM

Rating:
4.1/5
Expert tutors with experiences and qualities
Posted By
Best Tutors for school students, college students
Questions:
91085
Tutorials:
91115
Feedback Score:

Purchase it
Report this Question as Inappropriate
Question
1. Assume the economy is initially in a long-term equilibrium. Suppose Congress and the president
decide to reduce the budget deficit by making 10 percent across-the-board cuts to every
government program tomorrow (and for the record, 10 percent is a very big number in this
context). Use the AD/AS model to describe the effect this policy will have on inflation and real
GDP in the short run and the long run.

2. For a number of years, the federal funds rate has been at or very near zero. Under what
circumstances would it behoove any central bank to offer a negative interest rate? Briefly explain
in no more than half a page

3. Suppose a central bank has increased its nation's nominal money supply considerably for several
years in a row, but without any increase in inflation. Over the same time, suppose its economy
has not grown. Given this information, explain why this monetary policy has not yielded any
results. Use the aggregate demand/aggregate supply (AD/AS) model to aid in your answer, and
assume the economy is in a long-term equilibrium as your starting point. A good approach would
be to compare what is supposed to happen to AD when the Fed conducts expansionary
monetary policy to this situation.

Tags equilibrium longterm initially economy aume suppose policy model adas number inflation supply bank rate percent central longterm equilibrium economy given grown monetary information economyhas explain time nominal nations money considerably increase severalyears yielded aggregate supposed

Tutorials for this Question
Available for
$9.00

Assume the economy is initially in a long-term equilibrium

Tutorial # 00540079
Posted On: 06/09/2017 03:05 AM
Posted By:
Best Tutors for school students, college students dr.tony
Expert tutors with experiences and qualities
Questions:
91085
Tutorials:
91115
Feedback Score:
Report this Tutorial as Inappropriate
Tutorial Preview …economy xx initially…
Attachments
Assume_the_economy_is_initially_in_a_long-term_equilibrium.ZIP (18.96 KB)
Preview not available.
Purchase this Tutorial @ $9.00 *
* - Additional Paypal / Transaction Handling Fee (3.9% of Tutorial price + $0.30) applicable
Loading...