This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A change in which of the following variables will have no direct effect on domestic demand? A) ... (Read 28 times)

tatyanajohnson

  • Hero Member
  • *****
  • Posts: 569
on: Jun 30, 2018
A change in which of the following variables will have no direct effect on domestic demand?
 
  A) domestic income
  B) foreign income
  C) government spending
  D) the interest rate (r)
  E) none of the above

Question 2

Explain how changes in the proportion of contracts that are indexed affect how a given change in monetary policy will affect economic activity.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

lorealeza

  • Sr. Member
  • ****
  • Posts: 345
Reply #1 on: Jun 30, 2018
Answer to Question 1

B

Answer to Question 2

An increase in nominal money growth will increase the real money supply causing an increase in economic activity. As the proportion of labor contracts that are indexed increases, the effects of changes in unemployment on inflation would increase. A reduction in u will cause an increase in inflation. When inflation rises in a period, some contracts (those that are indexed) will call for an immediate increase in wages further increasing inflation within that period. As indexation becomes more prevalent, that secondary effect on inflation will be magnified. This magnification of the inflation effect will cause the real money supply to increase by a smaller amount and, therefore, reduce the output effects of a given monetary expansion.


tatyanajohnson

  • Hero Member
  • *****
  • Posts: 569
Reply #2 on: Jun 30, 2018
Correct answers!


lorealeza

  • Sr. Member
  • ****
  • Posts: 345
Reply #3 on: Jun 30, 2018
Great! Please up vote :D


« previous next »
 

Did you know?

Anti-aging claims should not ever be believed. There is no supplement, medication, or any other substance that has been proven to slow or stop the aging process.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Did you know?

A serious new warning has been established for pregnant women against taking ACE inhibitors during pregnancy. In the study, the risk of major birth defects in children whose mothers took ACE inhibitors during the first trimester was nearly three times higher than in children whose mothers didn't take ACE inhibitors. Physicians can prescribe alternative medications for pregnant women who have symptoms of high blood pressure.

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

Did you know?

Although puberty usually occurs in the early teenage years, the world's youngest parents were two Chinese children who had their first baby when they were 8 and 9 years of age.

The Greenhouse Effect The Greenhouse Effect
Myocardial Oxygen supply and demand Myocardial Oxygen supply and demand
(a) The connection required to test a Halleffect sensor. (b) A typical waveform from a Hall-effect ... (a) The connection required to test a Halleffect sensor. (b) A typical waveform from a Hall-effect ...
Insolation and the Greenhouse Effect Insolation and the Greenhouse Effect
Apply direct thumb pressure into points along the upper trapezius from base of neck to shoulder. ... Apply direct thumb pressure into points along the upper trapezius from base of neck to shoulder. ...
Climate Change: Volcanoes Climate Change: Volcanoes
Video: DNA fingerprinting Animation

For a complete list of videos, visit our video library