« previous next »

Author Question: In the short-run, a temporary increase in money supply A) shifts the DD curve to the right, ... (Read 64 times)

genevieve1028

  • Hero Member
  • *****
  • Posts: 601
on: Jun 30, 2018
In the short-run, a temporary increase in money supply
 
  A) shifts the DD curve to the right, increases output and appreciates the currency.
  B) shifts the AA curve to the left, increases output and depreciates the currency.
  C) shifts the AA curve to the left, decreases output and depreciates the currency.
  D) shifts the AA curve to the left, increases output and appreciates the currency.
  E) shifts the AA curve to the right, increases output and depreciates the currency.

Question 2

Using a figure show that under full employment, a temporary fiscal expansion would increase output (over-employment) but cannot increase output in the long run.
 
  What will be an ideal response?


brittanywood

  • Sr. Member
  • ****
  • Posts: 355
Reply #1 on: Jun 30, 2018
Answer to Question 1

E

Answer to Question 2

A temporarily fiscal expansion will move the economy from DD1 to DD2, and output increases. A permanent fiscal expansion will also shift the AA curve to the left and down. The nominal exchange rate appreciates, i.e. E decreases.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

genevieve1028

  • Hero Member
  • *****
  • Posts: 601
Reply #2 on: Jun 30, 2018
Thank you :)


brittanywood

  • Sr. Member
  • ****
  • Posts: 355
Reply #3 on: Jun 30, 2018
Happy to help you


« previous next »
 

Did you know?

Vaccines cause herd immunity. If the majority of people in a community have been vaccinated against a disease, an unvaccinated person is less likely to get the disease since others are less likely to become sick from it and spread the disease.

Did you know?

Multiple sclerosis is a condition wherein the body's nervous system is weakened by an autoimmune reaction that attacks the myelin sheaths of neurons.

Did you know?

The average office desk has 400 times more bacteria on it than a toilet.

Did you know?

This year, an estimated 1.4 million Americans will have a new or recurrent heart attack.

Did you know?

The shortest mature adult human of whom there is independent evidence was Gul Mohammed in India. In 1990, he was measured in New Delhi and stood 22.5 inches tall.

Bell Curve for Intelligence IQ scores for a population-based sample usually fall into this kind of Bell Curve for Intelligence IQ scores for a population-based sample usually fall into this kind of
Students and Money Students and Money
The relationship between the permissible exposure limit (PEL), the short-term exposure limit (STEL), ... The relationship between the permissible exposure limit (PEL), the short-term exposure limit (STEL), ...
J or U dose-response curve J or U dose-response curve
Who Oversees the Food Supply? Who Oversees the Food Supply?
Experiments showing that long- or short-day plants flower in response to night length. Each horizont Experiments showing that long- or short-day plants flower in response to night length. Each horizont
Video: EpiPen Animation (Part 1)

For a complete list of videos, visit our video library