Question

Use the concepts of income effect and subsitution effect to
explain why the effect on desired savings of an increase in the
expected real interest rate is potentially ambiguous. **Draw
the saving curve for when (a) subsitution effect dominates (b)
income effect dominates.**

I need help with the graphs. PLEASE draw the graphs. Thank you.

Answer #1

Use
the concepts of income effect and substitution effect to explain
why the effect on desired saving of an increase in the expected
real interest rate is potentially ambiguous. (For full credit, make
sure you differentiate between borrowers and savers) Draw the
saving curve for when (a) substitution effect dominates (b) income
effect dominates (Make sure you label the axes)

Briefly explain whether the following statement is true
or false.
"The ‘paradox of thrift’ is the argument that
an increase in desired saving shifts the LM curve to the left as
individuals increase their demand for money, thus lowering real
GDP."
Please answer elaborately with proper reasoning, graphs and
equations. Also include a policy example.

Explain with the aid of appropriate graphs the effect of the
following on exchange rates in the short-run:
i. An increase in the domestic interest rate
ii. An increase in the foreign interest rate
iii. An increase in the expected future exchange rate

The demand curve in an individual market slopes down because of
the income effect, the substitution effect, and diminishing
marginal utility. Looking at the macro Aggregate Demand Curve,
describe the three reasons why an increase in the overall price
level results in lower aggregate expenditures: real-balance effect,
interest-rate effect, and foreign-purchases effect. (Explain each
of these three effects.)

Describe the Coriolis effect.
Why is it not an actual force?
Does the Coriolis effect affect objects moving East-West?
Explain.
Why does the Coriolis effect only affect objects that move over
large distances.
Would you expect that an interplanetary satellite would
experience a similar effect when travelling above-below the plane
of the solar system? travelling inwards-outwards along the plane of
the solar system? Explain!
Honestly just need help with question 5! In your own words
please! Thank you!!

a) Explain how and why an increase in the level of savings
affects the long-run growth of real income. b) Explain the role of
diminishing returns, and what this implies for relative growth
rates across countries. c) Carefully describe and explain one
government policy that could increase the long-run growth of real
income.
NOTE: (Please answer all parts, it's
the same question. NO Handwriting please, I have difficulty
understanding the handwritings, unfortunately.)

Why
does Aggregate-Demand (AD) curve slope downward? In your answer
explain the effect of a higher price level on a) real interest rate
and b) real exchange rate.

Assume the government increases spending by $100. Explain: (1)
through the multiplier process, why income Y will increase; and (2)
why the money market (LM Curve) cause investment to fall and thus
the increase in GDP to be less than hoped for. Use math and
graphs.

3. Use the classical model of a closed economy and the quantity
theory of money to predict how each of the following shocks would
affect real aggregate income (Y), the real interest rate (r), and
the price of goods and services (P) in a closed economy in the long
run, all else equal. For each shock, be sure to clearly state a
prediction for all three variables (up, down, or no change) and
illustrate your predictions with supply/demand diagrams for...

In this problem, you are asked to draw graphs. Please use a
straight edge and draw them as neatly as possible. Imagine the
world relative to a small open economy. Draw three graphs in order
to illustrate the initial conditions in the problem. The first
graph represents the world’s loanable funds market. Illustrate the
initial supply of loanable funds (Saving), initial demand for
loanable funds (investment), and the initial equilibrium world
interest rate (r*). Properly label the axes. Remember that...

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