« previous next »

Author Question: Explain what effect an increase in future expected output will have on the IS curve and LM curve in ... (Read 127 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?

Eating food that has been cooked with poppy seeds may cause you to fail a drug screening test, because the seeds contain enough opiate alkaloids to register as a positive.

Did you know?

Pregnant women usually experience a heightened sense of smell beginning late in the first trimester. Some experts call this the body's way of protecting a pregnant woman from foods that are unsafe for the fetus.

Did you know?

Medication errors are more common among seriously ill patients than with those with minor conditions.

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

Drugs and their effect table Drugs and their effect table
Flynn Effect IQ scores have risen across developed countries in recent decades. Source: Flynn (199 Flynn Effect IQ scores have risen across developed countries in recent decades. Source: Flynn (199
Many diesel fuel additives increase the cetane rating which results in improved fuel economy. Many diesel fuel additives increase the cetane rating which results in improved fuel economy.
The Greenhouse Effect: Influences on Temperature The Greenhouse Effect: Influences on Temperature
How an Increase in Income Inequality Affects the Desired Tax Rate How an Increase in Income Inequality Affects the Desired Tax Rate
The effect of selection on allele frequency The effect of selection on allele frequency
Video: Condensation and Hydrolysis Animation

For a complete list of videos, visit our video library