Question

i want this answer n graf for this 2 question.. i) The Central Bank sells government...

i want this answer n graf for this 2 question..

i) The Central Bank sells government securities to the public.  

ii) A tax reduction due to Covid-19 pandemic

Based on the AS-AD framework, explain and demonstrate the effect of the following situations on the equilibrium income and price levels...

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1. The Central Bank sells government securities to the public, effects on the equilibrium income and price levels;

If the Central Bank sells government securities to the public,it would decrease the reserves of the commercial banks and reduce their loans and investments and it also decrease the price of the government securities and increase their interest rates and reduces the business investments.

2. A tax reduction due to covid19 will effects the both AD and AS, AD curve will shifts to the right and AS curve also shifts to the right side. As result both output and income level increase and also price level rises.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
In country Z, the required reserve ratio is 10 percent. Assume that the central bank sells...
In country Z, the required reserve ratio is 10 percent. Assume that the central bank sells $50 million in government securities on the open market. (a) Calculate each of the following. (i) The total change in reserves in the banking system (ii) The maximum possible change in the money supply (b) Explain the impact of the central bank’s bond sale on the nominal interest rate. (c) What is the impact of the central bank’s bond sale on the equilibrium price...
If the central bank sells government securities from the private sector money market ,others things being...
If the central bank sells government securities from the private sector money market ,others things being equal,what would the effect be on the following? a)the economy's monetary base b)short-term money market interest rates c)aggregate supply and aggregate demand d)economic activity and inflation
Please only answer if you are 100% sure and I need the answers now. QUESTION 16...
Please only answer if you are 100% sure and I need the answers now. QUESTION 16 Suppose that the current dollar/peso exchange rate is $.12/peso, but both the US and Mexican central banks believe that the exchange rate should be 9 pesos/$. If both nations decide to use sterilized market intervention to achieve the desired exchange rate, which of the following will occur? The Mexican central bank will sell dollars, buy pesos, and conduct an open market sale of Mexican...
2.    We now want to study the same fiscal policy if the economy starts at full...
2.    We now want to study the same fiscal policy if the economy starts at full employment. (i)            Draw the aggregate demand curve and the short and long run supply curves for a country in a new diagram. Assume that the country starts at full employment. (ii)           The government decides to reduce taxes to households. Illustrate in your diagram the effect on the economy of lower taxes by shifting the curve(s). Mark the new short-run equilibrium after lower taxes P2,...
DocViewer Zoom Pages Problem Set 3 Due 12/12/19 1. A person deposits $500 into a bank...
DocViewer Zoom Pages Problem Set 3 Due 12/12/19 1. A person deposits $500 into a bank account. The reserve requirement is 25%. a. Set up the T-account b. What is the money multiplier? c. How much money is created? d. If the Federal Reserve purchased 100,000 in government bonds, how much money will be created? 2. The Federal Reserve sells bonds. a. Using a demand and supply model for loanable funds, show what happens to the supply of money and...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the marginal cost of the last unit sold. II. A monopolist with positive marginal costs and facing a linear demand curve always sets a quantity (or price) such that it sells on the elastic section of the demand curve. III. A monopolist regulated by marginal-cost pricing regulation sells at a price that covers its variable and fixed costs of production, but it still causes a...
Whatever It Takes: How the Fed Aims to Rescue the Economy The central bank is using...
Whatever It Takes: How the Fed Aims to Rescue the Economy The central bank is using tactics from the last financial crisis and deploying new ones to keep money flowing. Here are the basics. The Federal Reserve, under Jerome H. Powell, is moving to shore up the American economy during the coronavirus pandemic. Credit...Yuri Gripas/Reuters By Ben Casselman March 23, 2020 The Federal Reserve on Monday pledged to do, in essence, whatever it takes to keep the economy from collapsing...
Q1 - The number of adults (people greater than or equal to 15 years of age)...
Q1 - The number of adults (people greater than or equal to 15 years of age) that are considered officially unemployed (by government-calculated statistics) is typically different from (and usually less than) the number of adults actually without a job. This situation may arise because: i) The labor force (as calculated by government statistics) is inclusive only of adults who are either employed or actively seeking employment. ii) Full-time students, homemakers, and retirees are not considered part of the labor...
Hi. I want to get feedback on this question. What should i add or remove or...
Hi. I want to get feedback on this question. What should i add or remove or any correction. Boulded written is question and regulat writing is answer. Please guide. Thank you. BACKGROUND Apply audit risk and materiality concepts to address the following circumstances regarding Able & Baker LLP’s audits of the financial statements of Foster Engineering, Inc. 1. Able & Baker LLP auditors are beginning their audit of Foster’s 2017 financial statements. Because of changes in the market and increased...
QUESTION 17. Suppose there is an increase in the foreign interest rate. A country that fixes...
QUESTION 17. Suppose there is an increase in the foreign interest rate. A country that fixes its exchange rate   the Government instead uses a short‐term expansionary fiscal policy such as increasing government spending or cutting taxes) to improve the economy,   A. Both the current account and output will increase in the short‐run. B. The current account will worsen in the short run, and output will increase. C. Output will increase, but there will be no effect on the current account,...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT