« previous next »

Author Question: Suppose an increase in government spending occurs that is at least partially unexpected. Explain ... (Read 24 times)

waynest

  • Hero Member
  • *****
  • Posts: 553
on: Jun 30, 2018
Suppose an increase in government spending occurs that is at least partially unexpected. Explain what effect this will have on stock prices.
 
  What will be an ideal response?

Question 2

Assume that investment does not depend on the interest rate. A reduction in the money supply will cause which of the following for this economy?
 
  A) no change in the interest rate
  B) no change in output
  C) a reduction in investment
  D) an increase in investment


234sdffa

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 30, 2018
Answer to Question 1

Output rises and interest rates rise. Here, the effects are ambiguous. The rise in the interest rate will reduce stock prices while the increase in Y will increase them.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

The eye muscles are the most active muscles in the whole body. The external muscles that move the eyes are the strongest muscles in the human body for the job they have to do. They are 100 times more powerful than they need to be.

Did you know?

All patients with hyperparathyroidism will develop osteoporosis. The parathyroid glands maintain blood calcium within the normal range. All patients with this disease will continue to lose calcium from their bones every day, and there is no way to prevent the development of osteoporosis as a result.

Did you know?

The heart is located in the center of the chest, with part of it tipped slightly so that it taps against the left side of the chest.

Did you know?

In ancient Rome, many of the richer people in the population had lead-induced gout. The reason for this is unclear. Lead poisoning has also been linked to madness.

Did you know?

The U.S. Preventive Services Task Force recommends that all women age 65 years of age or older should be screened with bone densitometry.

Pott’s Occurs at the ankle and affects both bones of the lower leg (fibula and tibia) Pott’s Occurs at the ankle and affects both bones of the lower leg (fibula and tibia)
Gas exchange occurs at the alveolar capillary membrane. Gas exchange occurs at the alveolar capillary membrane.
Meningocele. (a) A meningocele is a herniation of the meninges, usually associated with the spinal c Meningocele. (a) A meningocele is a herniation of the meninges, usually associated with the spinal c
Inverse Relation Between IQ and Disease. Could this explain the Flynn effect? Inverse Relation Between IQ and Disease. Could this explain the Flynn effect?
In 2013, Americans learned that the federal government massively surveys their phone calls and e-mai In 2013, Americans learned that the federal government massively surveys their phone calls and e-mai
A Partially Filled 100-Unit Insulin Syringe A Partially Filled 100-Unit Insulin Syringe
Video: Bacteriophage (Virus) - Mice Experiment

For a complete list of videos, visit our video library