Warning: Trying to access array offset on value of type bool in /home/topgsnkq/myessaydesk.com/wp-content/themes/enfold/framework/php/function-set-avia-frontend.php on line 637

MacroEcons

Short Answer Questions:

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now
  • Consider the banking system. ‘Reserves are deposits that banks have received but have not loaned out’.
    • Banks must hold reserves. Why? (2 marks)
    • What are excess reserves? (1 mark)
    • How are excess reserves calculated? (1 mark)
    • What is the significance of excess reserves? (2 marks)
  • Consider the following statement in the short-run and the long-run: “The quantity theory of money (quantity equation) states than an increase in the money supply will lead to an equiproportionate increase in the price level”. Is this true or false? Explain. (4 marks)
  • A book, One World, Ready or Not – The Manic Logic of Global Capitalism, by William Greider, suggests that because of the rapid growth in productivity, output is increasing too fast – too fast, that is, for total demand to keep up. As a result, the economy could collapse as a result of overproduction.
    • Using the aggregate demand/aggregate supply diagram, illustrate the effect of increased productivity the short-run (holding the LRAS curve constant). (1 mark) (Be sure to add labels to indicate clearly the new equilibrium position)
    • What is the impact on unemployment and inflation as a result of the new equilibrium depicted in part a)? (1 mark)

Explain this adjustment process. (3 marks)

Illustrate here (Tips: to create new lines, simply copy the existing curves and move to the new locations)

SRAS

AD

Inflation rate

Quantity of output

LRAS


4. Imagine that your major trading partners impose high tariffs on all goods, services and resources entering their countries. (6 marks)

  • Illustrate the short-run impact on your own economy in the diagram below. (Be sure to add labels to indicate clearly the new short-run equilibrium position) (1 mark)
  • What is the effect on the unemployment rate and the inflation rate in your nation in the short-run? (1 mark)
  • Economists argue that the economy will automatically self-correct, adjusting to a new long-run equilibrium over time. Clearly explain this adjustment process. (Be sure to explain the adjustment not just state that a curve shifts to restore long-run equilibrium – ensure that this in your own words) (3 marks)

Illustrate here (Tips: to create new lines, simply copy the existing curves and move to the new locations)

SRAS0

AD

LRAS

Inflation rate

Quantity of output

3 Lecture Slides on the topic are attached as well. Thanks

 
"Looking for a Similar Assignment? Order now and Get 15% Discount! Use Code "FIRST15"

"Do you have an upcoming essay or assignment due?


Get any topic done in as little as 6 hours

If yes Order Similar Paper

All of our assignments are originally produced, unique, and free of plagiarism.