Question

Assume that you are one of six thousand people who live on the small island of...

Assume that you are one of six thousand people who live on the small island of Tap. This island is small and can only produce a maximum of six thousand bags of corn a year (ignore technological advances in corn production that are occurring elsewhere in the world). The six thousand bags of corn produced are just enough for the residents since each resident only earns enough to buy one bag of corn a year (a pity since the Tapese really love corn!). The currency on Tap is the US dollar. Now suppose that the government of Tap injects more US dollars into the economy, and the result is that person now ends up having twice the amount of US dollars as he or she did before. Make a logical prediction about prices of corn in the economy, and explain what principle of economics is illustrated in this scenario. Develop a response that includes examples and evidence to support your ideas, and which clearly communicates the required message to your audience. Organize your response in a clear and logical manner as appropriate for the genre of writing. Use well-structured sentences, audience-appropriate language, and correct conventions of standard American English. Need this essay as soon as possible please! Need this essay done please help!

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer:

Response for the given topic:

In the small island of Tap, the production and the supply is fixed assuming that there are no imports.

The population is six thousand people and production is six thousand bags of corn.

Suppose that the original price of a bag of com is $1.

The money supply in the economy has increased twice as the people have twice the holding of US dollars as before.

Thus, the aggregate demand for output double at all price level.

The aggregate demand curve shifts rightwards.

The new aggregate demand curve intersects the vertical aggregate supply curve at a higher price level.

This increases the price of com twice.

This indicates the net neutrality of money as the price of money doubles with the doubling of the money supply and no impact on the output.

This is a theory of classical economics and propounded by Adam Smith.

Graph:

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
Performance Evaluation Who are you? You are a team leader at Anders Consulting, a small but...
Performance Evaluation Who are you? You are a team leader at Anders Consulting, a small but growing strategy consulting firm in Atlanta. For a little over three months, you have been supervising a team of junior-level management consultants, who just finished developing a strategic plan with a division of RGP Financial Services. What's the current situation? The work you have supervised has involved a variety of research, interviewing, writing, and speaking activities. Part of your job as team leader is...
After listening to this podcast, list and discuss the safe injection practices you should follow to...
After listening to this podcast, list and discuss the safe injection practices you should follow to prevent causing harm. Protecting Patients from Unsafe Injections: What Every Provider Needs to Know [Announcer] This program is presented by the Centers for Disease Control and Prevention. [Joyanna Wendt] Hello. I’m Dr. Joyanna Wendt, a Medical Officer at the Centers for Disease Control and Prevention, or CDC, and today we’re talking about injection safety. I know some of you are thinking, “That’s so basic....
Exploring Innovation in Action Power to the People – Lifeline Energy Trevor Baylis was quite a...
Exploring Innovation in Action Power to the People – Lifeline Energy Trevor Baylis was quite a swimmer in his youth, representing Britain at the age of 15. So it wasn’t entirely surprising that he ended up working for a swimming pool firm in Surrey before setting up his own company. He continued his swimming passion – working as a part-time TV stuntman doing underwater feats – but also followed an interest in inventing things. One of the projects he began...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind of your average Argentine, who remembers the tough times and hyperinflation of the 1980s, the events of 2001 and 2002 have brought fiscal policy back to the forefront of public concern. Though the early 1990s may have been characterized by financial optimism, Argentina has been in a recession since Brazil's 1998 monetary crisis sent shockwaves across the regional and global markets. In early 2002,...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their awareness of internal and external issues? ???ALASKA AIRLINES: NAVIGATING CHANGE In the autumn of 2007, Alaska Airlines executives adjourned at the end of a long and stressful day in the midst of a multi-day strategic planning session. Most headed outside to relax, unwind and enjoy a bonfire on the shore of Semiahmoo Spit, outside the meeting venue in Blaine, a seaport town in northwest Washington state. Meanwhile, several members of...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary rivals? How will the acquisition of Reebok by Adidas impact the structure of the athletic shoe industry? Is this likely to be favorable or unfavorable for New Balance? 2- What issues does New Balance management need to address? 3-What recommendations would you make to New Balance Management? What does New Balance need to do to continue to be successful? Should management continue to invest...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT