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Author Question: Forward guidance refers to central banks A) setting long-term interest rates. B) engaging in ... (Read 78 times)

Mr. Wonderful

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on: Jun 29, 2018
Forward guidance refers to central banks
 
  A) setting long-term interest rates.
  B) engaging in monetary policy to offset the negative side-effects of the government's fiscal policies.
  C) telling the public what future monetary policy will be.
  D) simultaneously reducing unemployment and inflation.

Question 2

C = 2,800 + 0.9Y
  I = 750
  G = 1,200
  NX = 150
 
  Given the equations for C, I, G, and NX above, what is the equilibrium level of GDP (Y)?
 
  What will be an ideal response?


bitingbit

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Reply #1 on: Jun 29, 2018
Answer to Question 1

C

Answer to Question 2

Y = C + I + G + NX.
Y = 2,800 + 0.9Y + 750 + 1,200 +150.
Y = 4,900 + 0.9Y.
0.1Y = 4,900.
Y = 49,000.


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