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Which of the following is an issue in macroeconomics?

 

I. the effect of consumer income on inferior goods.

II. the effect of increasing the money supply on inflation

III. the effect of substitutes on consumer demand.

IV. the effect of an increase in input price on supply.

 

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Hubert Koch
Hubert KochLv2
16 Apr 2019

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a. What effect will each of the following have on the DEMAND for coffee (i.e. Increase Demand, Decrease Demand, or NO CHANGE)?

i. There is an increase in the price of coffee.

ii. There is an increase in the price of tea, which consumers view as a substitute for coffee.

iii. There is an increase in consumer incomes, assuming coffee is a normal good.

iv. There is a decrease in the number of consumers who buy coffee.


B. a. What effect will each of the following have on the SUPPLY of soybeans? (i.e. Increase Supply, Decrease Supply, or NO CHANGE)?

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Please also give me explanations as to why.

Indicate how each of the following events would affect the long-run aggregate supply [LRAS] curve [i.e., shift the curve left, shift the curve right, move along the curve, no effect on the curve].

[i] An advance in production technology

[ii] An increase in consumer spending

[iii] A long-run decrease in the price level

[iv] An decrease in nominal wage rates

Why is the slow growth that can result from a contractionary policy a positive effect? 
 
(i) It can decrease inflation.
(ii) It can increase interest rates.
(iii) It can decrease available credit.
(iv) It can increase the money supply. 

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