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Macroeconomics
Use IS-LM and AD-AS framework to explain -
How does an expansionary fiscal policy works in keynesian model? how does the classical school explain this?
How does an expansionary fiscal policy works in keynesian model? how does the classical school explain this?
Macroeconomics
GDP deflator is a ratio between ?
Macroeconomics
GDP deflator is a ratio between ?
Macroeconomics
Suppose an economy is in an initial equilibrium in terms of AD and SRAS with Y = 480 and P at some level. Suppose further that the economy's full employment level of GDP, as given by the LRAS curve, is at Y = 500.
i) Draw an Aggregate Demand and a typical upward sloping Aggregate Supply curve that illustrate this initial situation, identifying and naming any GDP gap that may be present.
i) Draw an Aggregate Demand and a typical upward sloping Aggregate Supply curve that illustrate this initial situation, identifying and naming any GDP gap that may be present.
Macroeconomics
what is regression method please
Macroeconomics
Assume perfect capital mobility and fixed exchange rates. Furthermore, assume that no changes in the nominal exchange rate are expected and that there are no risk premia. The economy in characterized as follows: LM curve: i = 0.5Y - 0.1 M/P, IS curve i = -Y + R + 100, nominal exchange rate E = 7.5, price level P = 2, world interest rate i^W = 5.5, world price level P^W= 2. Calculate the change in Y if the price level changes from P_0=2 to P_1=1.
Macroeconomics
Which options are correct?
Assume perfect capital mobility, fixed nominal exchange rate and adaptive expectations. How does a one-time increase in productivity affect the economy?
Select one or more:
a. It lowers the domestic price level permanently.
b. It moves the LAS curve to the right but the AS curve does not change.
c. It moves both the LAS ans AS curves to the right but the AS curve changes its position over time.
d. It lowers the domestic price level but only temporarily
Assume perfect capital mobility, fixed nominal exchange rate and adaptive expectations. How does a one-time increase in productivity affect the economy?
Select one or more:
a. It lowers the domestic price level permanently.
b. It moves the LAS curve to the right but the AS curve does not change.
c. It moves both the LAS ans AS curves to the right but the AS curve changes its position over time.
d. It lowers the domestic price level but only temporarily
Macroeconomics
Fiscal policy needs monetary policy to be fully effective. Illustrate this statement using the IS-LM model
Macroeconomics
The economy of Kenya has a budget deficit of KSH 500B. This deficit is likely to be funded through domestic borrowing and taxation. Using an appropriate model, explain the macroeconomic implications of such a move.
Macroeconomics
Mark correct statements about the short-run AS curve.
Select one or more:
a. The positively sloped (but not vertical) AS curve can be derived by assuming real rigidities on the labor market.
b. The positively sloped (but not vertical) AS curve can be derived by assuming nominal rigidities on the labor market.
c. Rational expectations imply a vertical AS curve.
d. Flexible prices on the labor and goods market imply an AS curve with a positive, but not vertical, slope.
Select one or more:
a. The positively sloped (but not vertical) AS curve can be derived by assuming real rigidities on the labor market.
b. The positively sloped (but not vertical) AS curve can be derived by assuming nominal rigidities on the labor market.
c. Rational expectations imply a vertical AS curve.
d. Flexible prices on the labor and goods market imply an AS curve with a positive, but not vertical, slope.
