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FA25 ECON 302 002 Final Exam
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Consider an economy with the following IS curve: ðŒ ð : ð ~ ð¡ = ð ¯ â ð ¯ ( ð ð¡ â ð ¯ )  Suppose we assume ð ¯ = 0.03 , ð ¯ = 1 , ð ð¡ = ð ¯ = 0.045 . Let Î ð ~ ð¡ = ð ~ ð¡ â ð ~ ð¡ â² , where ð ~ ð¡ is short-run output when the real interest rate equals ð ð¡ and ð ~ ð¡ â² is short-run output when the real interest rate equals ð ð¡ â² . If the real interest rate falls from ð ð¡ to ð ð¡ â² = 0.02 , then Î ð ~ ð¡ = ______ percent. Round your answer to the nearest tenth of a percent.
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To begin, restate the given IS relationship and the numeric values used in the calculation: the IS curve is Ŷ_t = aÌ â bÌ (R_t â rÌ), with aÌ = 0.03, bÌ = 1, and rÌ = R_t = 0.045. The initial short-run out......Login to view full explanationç»åœå³å¯æ¥ç宿Žçæ¡
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Consider the IS curve ð ~ ð¡ = ð ¯ â ð ¯ ( ð ð¡ â ð ¯ ) + 𥠯 ð ~ ð¡ , where ð ¯ = 1 , 𥠯 = 1 / 4 , and ð ð¡ â ð ¯ = 0.03 . If there is a positive demand shock where the economy goes from ð ¯ = 0 to ð ¯ = 0.05 , then short-run output changes by ______ percentage points (enter a negative number for a fall in short-run output and a positive number for a rise in short-run output). Round your answer to the nearest tenth of a percent.
Using the IS curve ð ~ ð¡ = ð ¯ â ð ¯ ( ð ð¡ â ð ¯ ) , in the long run, ð ¯ [ Select ] equals 0 equals 1 and ð ð¡ [ Select ] > < = ð ¯ , so that [ Select ] the economy's actual output equals potential output. the economy is in a boom the economy is in a recession .
Consider the IS curve ð ~ ð¡ = ð ¯ â ð ¯ ( ð ð¡ â ð ¯ ) + 𥠯 ð ~ ð¡ , where ð ¯ = 1 , 𥠯 = 1 / 4 , and ð ð¡ â ð ¯ = 0 . If there is no demand shock, i.e. ð ¯ = 0 , and the real interest rate increases by 1 percentage points, then short-run output changes by ______ percentage points (enter a negative number for a fall in short-run output and a positive number for a rise in short-run output). Round your answer to the nearest tenth of a percent.
Consider an economy with the following IS curve: ðŒ ð : ð ~ ð¡ = ð ¯ â ð ¯ ( ð ð¡ â ð ¯ )  Suppose we assume ð ¯ = â 0.02 , ð ¯ = 1 , ð ð¡ = ð ¯ = 0.06 . Let Î ð ~ ð¡ = ð ~ ð¡ â² â ð ~ ð¡ , where ð ~ ð¡ is short-run output when the real interest rate equals ð ð¡ and ð ~ ð¡ â² is short-run output when the real interest rate equals ð ð¡ â² . If the real interest rate falls from ð ð¡ to ð ð¡ â² = 0.04 , then Î ð ~ ð¡ = ______ percent. Round your answer to the nearest tenth of a percent.
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