« previous next »

Author Question: Explain what effect an increase in future expected output will have on the IS curve and LM curve in ... (Read 113 times)

sabina

  • Hero Member
  • *****
  • Posts: 563
on: Jun 30, 2018
Explain what effect an increase in future expected output will have on the IS curve and LM curve in the current period.
 
  What will be an ideal response?

Question 2

Which of the following are reported as liabilities on a bank's balance sheet?
 
  A) reserves
  B) checkable deposits
  C) consumer loans
  D) deposits with other banks


jordangronback

  • Sr. Member
  • ****
  • Posts: 339
Reply #1 on: Jun 30, 2018
Answer to Question 1

An increase in Ye will cause human wealth to be higher. Individuals will increase their current consumption and the IS curve will shift right. An increase in Ye will also cause firms to increase their expectations of future expected profits. When this occurs, the discounted present value of future profits is higher causing I to increase. As I increases, the IS curve shifts right. This will have no effect on the LM curve.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question

sabina

  • Hero Member
  • *****
  • Posts: 563
Reply #2 on: Jun 30, 2018
Thank you


jordangronback

  • Sr. Member
  • ****
  • Posts: 339
Reply #3 on: Jun 30, 2018
No problemo


« previous next »
 

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

Did you know?

Most fungi that pathogenically affect humans live in soil. If a person is not healthy, has an open wound, or is immunocompromised, a fungal infection can be very aggressive.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Did you know?

Illicit drug use costs the United States approximately $181 billion every year.

Did you know?

About 100 new prescription or over-the-counter drugs come into the U.S. market every year.

Habituation to the Aversive Effect of the Odor of Pups Habituation to the Aversive Effect of the Odor of Pups
MAP sensors use three wires: 1.5 volt reference from the PCM 2. Sensor signal (output signal) 3. ... MAP sensors use three wires: 1.5 volt reference from the PCM 2. Sensor signal (output signal) 3. ...
The Greenhouse Effect: Influences on Temperature The Greenhouse Effect: Influences on Temperature
Factors Affecting Saturation and Condensation: Effect of Curvature Factors Affecting Saturation and Condensation: Effect of Curvature
U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994 U.S. Subsurface Coal Mining: Output, Price, and Output per Worker-Hour, 1949–1994
Stem-lengthening effect of gibberellins. Stem-lengthening effect of gibberellins.
Video: Erythropoietin (EPO)

For a complete list of videos, visit our video library