« previous next »

Author Question: Suppose an increase in government spending occurs that is at least partially unexpected. Explain ... (Read 68 times)

waynest

  • Hero Member
  • *****
  • Posts: 553
on: Jun 30, 2018
Suppose an increase in government spending occurs that is at least partially unexpected. Explain what effect this will have on stock prices.
 
  What will be an ideal response?

Question 2

Assume that investment does not depend on the interest rate. A reduction in the money supply will cause which of the following for this economy?
 
  A) no change in the interest rate
  B) no change in output
  C) a reduction in investment
  D) an increase in investment


234sdffa

  • Sr. Member
  • ****
  • Posts: 341
Reply #1 on: Jun 30, 2018
Answer to Question 1

Output rises and interest rates rise. Here, the effects are ambiguous. The rise in the interest rate will reduce stock prices while the increase in Y will increase them.

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

More than 2,500 barbiturates have been synthesized. At the height of their popularity, about 50 were marketed for human use.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

Only one in 10 cancer deaths is caused by the primary tumor. The vast majority of cancer mortality is caused by cells breaking away from the main tumor and metastasizing to other parts of the body, such as the brain, bones, or liver.

Did you know?

In 1844, Charles Goodyear obtained the first patent for a rubber condom.

Did you know?

Thyroid conditions may make getting pregnant impossible.

Telangiectasias usually occurs in women and on the face Telangiectasias usually occurs in women and on the face
The world attempted to deal with Somalia as if it were a real country but painfully learned that Som The world attempted to deal with Somalia as if it were a real country but painfully learned that Som
How an Increase in Income Inequality Affects the Desired Tax Rate How an Increase in Income Inequality Affects the Desired Tax Rate
Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ... Let A ⊆ R and p ∈ A. Suppose A\{p}6= ∅. Prove that p is an isolated point of A if and ...
Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ... Let f be a real function with domain R. Suppose that for each ǫ > 0, there is a continuous ...
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ... Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Video: Skin Cancer

For a complete list of videos, visit our video library