Macroeconomics Answers

Consider each of the following labor‐market developments. In each case, indicate whether the event raises or lowers the natural rate of unemployment, and whether that effect arises because of a change in the amount of frictional unemployment or because of a change in the amount of structural unemployment.
a) More firms start paying “efficiency wages.”

When inflation occurs who benefits more, creditors or debtors

Suppose that after the 2008 elections, the new President and Congress act to cut government spending and, by doing so, eliminate the current federal government budget deficit.
a) Does this change in policy shift the demand curve or the supply curve in the market for loanable funds?
b) Use a supply‐and‐demand diagram for loanable funds to show in which direction the relevant curve shifts.
c) Does the interest rate rise or fall as a result of this change in policy?
d) What happens to private investment as a result of this change in policy?
e) What effect would this policy have on the productivity of US workers?

The spread of the coronavirus in the US has had negatively effects on the US economy. GDP growth rate went negative (-5.8%) in the first quarter of 2020 and unemployment rate spiked to 14.7% in April. Use the aggregate supply model to explain short run downturn and make sure to indicate the shifts in the curve

Earlier this year, oil prices fell to historic lows. Using the aggregate demand and supply model from Chapter- Intro to Economic Fluctuations, explain the effects of this drop in oil prices on the economy in short run and long run

et us say the income elasticity of money demand is 0.5 and the interest elasticity of money demand is –0.3 (as the empirical studies suggest). What is the percentage change of the real money demand if income increases 5.5% at the same time that the interest rate decreases from 4.2% to 3.8%?

Suppose the interest rate is 8% and a bond with annual coupon of $90 matures in one year time paying its face value of $1000. What is bond's current price?

a) An increase in private savings which is accompanied by an equivalent increase in exports would increase the domestic investment. True or false

Can someone please explain what will be effect of an expansionary fiscal policy on output and price in the short and long run, under fixed vs floating exchange rate regime and perfect capital mobility? What IS-LM and AD-SRAS-LRAS graphs will be used??

Given that IS is Y = 2500-50i, and the interest rate reaction function is ip = 2 + 0.5(P-P*), where ip is the central bank policy rate. Assume that i (interest rate) is 0.5 + ip (interest rate is a wedge over the policy rate). Determine the AD function. If AS function was Y = 0.25(P-P*) + 2000 determine Y* and P* and inflation rate. Assume P* = 105.