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 80 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?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

One way to reduce acid reflux is to lose two or three pounds. Most people lose weight in the belly area first when they increase exercise, meaning that heartburn can be reduced quickly by this method.

Did you know?

Children with strabismus (crossed eyes) can be treated. They are not able to outgrow this condition on their own, but with help, it can be more easily corrected at a younger age. It is important for infants to have eye examinations as early as possible in their development and then another at age 2 years.

Did you know?

In 1885, the Lloyd Manufacturing Company of Albany, New York, promoted and sold "Cocaine Toothache Drops" at 15 cents per bottle! In 1914, the Harrison Narcotic Act brought the sale and distribution of this drug under federal control.

Did you know?

Human neurons are so small that they require a microscope in order to be seen. However, some neurons can be up to 3 feet long, such as those that extend from the spinal cord to the toes.

Nebulizer. The nebulizer converts a liquid medication to a mist that is easily inhaled. A face mask, Nebulizer. The nebulizer converts a liquid medication to a mist that is easily inhaled. A face mask,
The effect of a double bond on the shape of fatty acids The effect of a double bond on the shape of fatty acids
Bones change radically in size and shape from newborn to adult, as these cervical vertebrae demonstr Bones change radically in size and shape from newborn to adult, as these cervical vertebrae demonstr
Change in air temperature at various air flow rates for a 7 pass operation Change in air temperature at various air flow rates for a 7 pass operation
Defining Climate Change Defining Climate Change
For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ... For each function f(x) = 6x^2 - 4, estimate the instantaneous rate of change for the given ...
Video: Types of energy transfer reactions: oxidation-reduction reactions and ATP generation reactions

For a complete list of videos, visit our video library