Question

How do I apply a decrease in repo rate and increasing in government spending on a...

How do I apply a decrease in repo rate and increasing in government spending on a AD-AS curve?

Homework Answers

Answer #1

A DECREASE IN REPO RATE WILL INCREASE THE MONEY SUPPLY.

The shift in AD curve due to these changes is shown in the attachment.

Dear Student/ Learner, it was my great pleasure to help you solving this problem. I wish you best luck for your learning endeavour.
Happy Learning

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
QUESTION 21 Event: Decrease in government spending due to concerns about increasing debt. (Long Run) Question:...
QUESTION 21 Event: Decrease in government spending due to concerns about increasing debt. (Long Run) Question: What is the change in aggregate demand (AD)? a. Increase b. Decrease c. No change d. Indeterminate QUESTION 22 Event: Decrease in government spending due to concerns about increasing debt. (Long Run) Question: What is the change in short run aggregate supply (SRAS)? a. Increase b. Decrease c. No change d. Indeterminate    QUESTION 23 Event: Decrease in government spending due to concerns about...
Suppose the government reduces taxes but holds government spending constant, thus increasing the government budget deficit....
Suppose the government reduces taxes but holds government spending constant, thus increasing the government budget deficit. 1. What would be the major effect in the market for loanable funds?                   Increase in demand for loanable funds (increased supply of bonds)                                  Decrease in demand for loanable funds (decreased supply of bonds)                   Increase in supply of loanable funds (increased demand for bonds)                   Decrease in supply of federal funds (decreased demand for bonds) Why? 2. Graphically illustrate the effect on the equilibrium interest rate...
Describe the connection between government spending and the unemployment rate? How does government spending that stimulates...
Describe the connection between government spending and the unemployment rate? How does government spending that stimulates short term job creation differ from long-term job creation?
Multiple questions: If Government spending decreases by $100, GDP will    a) increase by $500   b)...
Multiple questions: If Government spending decreases by $100, GDP will    a) increase by $500   b) fall by $500   c) fall by $400    d) increase by $900   e) fall by $900 If taxes increase by $100, GDP will    a) increase by $400   b) decrease by $400   c) rise by $500    d) fall by $600       e) not change Suppose that Congress reduced Government spending at the same time that the price of imported oil increased. This would...
In an aggregate demand-aggregate supply diagram, equal decreases in government spending and taxes will Group of...
In an aggregate demand-aggregate supply diagram, equal decreases in government spending and taxes will Group of answer choices not affect the AD curve. increase the equilibrium GDP. shift the AD curve to the left. shift the AD curve to the right.
A decrease in tax rates has no effect on the AD curve. causes the AD curve...
A decrease in tax rates has no effect on the AD curve. causes the AD curve to shift left. causes the AD curve to shift right. has only a short-term effect on real GDP. usually leads to a reduction in potential GDP. 2. To reduce the size of economic fluctuations, the government could make fewer permanent changes in government spending. change government purchases often to encourage a shift of the aggregate demand curve. increase spending during a recession and decrease...
The components of spending are C, I, G and NX. G stands for government purchases which...
The components of spending are C, I, G and NX. G stands for government purchases which do NOT include transfer payments. Which of the following is NOT a transfer payment. government pays the salary of military troops social security payments to retirees unemployment benefits to workers who have lost their jobs payments to low income individuals to support food purchases (colloquially known as food stamps) Which of the following would increase consumption spending AND shift the aggregate demand curve to...
The government is deciding whether to increase government spending by $75 or decrease taxes by $75....
The government is deciding whether to increase government spending by $75 or decrease taxes by $75. If the marginal propensity to consume is 85%, which will be more e ective? In other words, which will increase total spending more? Show all work.
#23 An expansion in government spending, unaccompanied by an increase in government revenue, results in which...
#23 An expansion in government spending, unaccompanied by an increase in government revenue, results in which of the following: a. A decrease interest rate b. A decrease in net capital outflows c. An increase in the quantity of tradable loanable funds d. None of the above Answer is B, but why? Please explain. What concepts do I need to know to be able to get to this answer?
1) How will our AD/AS graph look like when U.S. Government increases spending for public schools?...
1) How will our AD/AS graph look like when U.S. Government increases spending for public schools? 2) How will our AD/AS graph look like when domestic producers are given government subsidies? 3) How will our AD/AS graph look like when U.S. Congress passes law to decrease the age of working Americans to 13? 4) How will our AD/AS graph look like when the cost of coal rises? 5) How will our AD/AS graph look like when the U.S. invades Canada?...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT