When there is no persistence in the productivity shock process, the production economy model with investment can generate a counter - cyclical current account movement. true or false? explain.
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cyclical current account movement. true or false? explain.
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- Does the ukraine war pose a risk of stagflation in the future?What are the automatic adjustment mechanisms for current account imbalances under the classical and Keynesian views?Please use the AD-AS model to analyze the effects of monetary policy and fiscal policy on economic outcome in an open economy: a. Please show graphically the shifting of the AD curve after the Fed conducts an expansionary monetary policy in a closed economy (A closed economy means there is no international trade.). How do the price level and the real GDP change? b. Suppose the economy becomes an open economy. Please revise the result that you get in part (a). Please explain how you get the new result using the AD-AS model. c. Please show graphically the shifting of the AD curve after the federal government conducts an expansionary fiscal policy in a closed economy. Please show the crowding-out effect. How do the price level and the real GDP change? d. Suppose the economy becomes an open economy. Please revise the result that you get in part (c). Please explain how you get the new result based on the AD-AS model.
- Using the AD-LRAS model, an increase in capital accumulation cause the price level to ["", "", ""] and potential real GDP to ["", "", ""] .Use the logarithmic model (U=ln(C1)+In(C2)) to answer this multiple choice problem. In the two-period logarithmic model reviewed in class, the change in the Current Account caused by a temporary positive INCOME (endowment) shock is___ caused by a permanent positive INCOME shock. the change (a) smaller than (b) equal to (c) None of the above (d) greater thanChoose TWO of the four macroeconomic objectives studied such as Full employment, Price stability, A high, but sustainable, rate of economic growth. Keeping the balance of payments in equlibrium : State why governments / decision makers try to achieve the TWO macroeconomic objectives Identify key problems which may be encountered when attempting to balance these two objectives Evaluate the macroeconomic measures, employing fiscal and/or monetary policies, which could be taken to balance these two objectives. The structure of your answer to this question should include a brief introduction, main body, and conclusion which summarises your views.
- Using the dynamic AD/AS model, explain why Kennedy is concerned about the state of the global economy. What difference might it make to the Australian economy if the trading relationship between China and Australia deteriorates as political tensions continue to increase?What caused stagflation? How did it affect the world economy in the 1970s?Do the existence of SIFIs represent a threat to the economic stability of the country? Why or why not? Explain how the post great-recession regulations tried to deal with this issue.
- Consider the intertemporal model with two time periods. Home is a small open economy thatcan borrow and lend in the first period at a fixed world real interest rate of r* = 4%. In thefirst period output is Q0 = 800. Because of a recession, output in the second period output isexpected to fall to Q1 = 500. The country wants to smooth consumption as much as possible.The country begins with no external assets or liabilities. Finally, assume that the intertemporalutility function at home isu(c0) + βu(c1)where β = 1/1+r*u is concave (i.e. consumers are risk averse and want to smooth consumption).(a) Solve for consumption, the current account, and financial account in the first period (t = 0).(b) Solve for the trade balance, current account, and financial account in the second period(t = 1).(c) Would Home be better off or worse off if the world interest rate is 1% instead of 4%?Explain using the appropriate equations.Using the dynamic AD/AS model, explain why expert is concerned about the state of the global economy. What difference might it make to the Australian economy if the trading relationship between China and Australia deteriorates as political tensions continue to increase?Elaborate on the impact of a central bank's reduction in interest rates using the AD-AS model.
