Refer to the table for Moola given below to answer the following questions.
A. What is the equilibrium interest rate in Moola?
B. What is the level of investment at the equilibrium interest rate?
C. Is there either a recessionary output gap (negative GDP gap) or an inflationary output gap (positive GDP gap) at the equilibrium interest rate and, if either, what is the amount?
D. Given money demand, by how much would the Moola central bank need to change the money supply in order to close the output gap?
E. What is the (expenditure) multiplier in Moola?
Refer to the table for Moola given below to answer the following questions.
A. What is the equilibrium interest rate in Moola?
B. What is the level of investment at the equilibrium interest rate?
C. Is there either a recessionary output gap (negative GDP gap) or an inflationary output gap (positive GDP gap) at the equilibrium interest rate and, if either, what is the amount?
D. Given money demand, by how much would the Moola central bank need to change the money supply in order to close the output gap?
E. What is the (expenditure) multiplier in Moola?
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Related questions
Complete the following table:
Instructions: Enter your responses as whole numbers.
| Real Output Demanded (in $ billions) by | ||||||||||
| Price Level |
Consumers | + | Investors | + | Government | + | Net Exports | = | Aggregate Demand | Aggregate Supply |
| 120 | 80 | 15 | 20 | 10 | ? | 320 | ||||
| 110 | 92 | 16 | 20 | 12 | ? | 260 | ||||
| 100 | 104 | 17 | 20 | 14 | 215 | |||||
| 90 | 116 | 18 | 20 | 16 | 200 | |||||
| 80 | 128 | 19 | 20 | 18 | 185 | |||||
| 70 | 140 | 20 | 20 | 20 | 175 | |||||
| 60 | 154 | 21 | 20 | 22 | 170 | |||||
(a) What is the level of equilibrium real GDP?
$ billion
(b) What is the equilibrium price level?
$
(c) If full employment occurs at a real GDP of $200 billion, what kind of GDP gap exists?
| An inflationary GDP gap | |
| A recessionary GDP gap |
(d) How large is that gap?
(e) Which macroeconomic problem exists here?
| Unemployment | |
| Inflation |
Complete the following table:
Instructions: Enter your responses as whole numbers.
| Real Output Demanded (in $ billions) by | ||||||||||
| Price Level |
Consumers | + | Investors | + | Government | + | Net Exports | = | Aggregate Demand | Aggregate Supply |
| 120 | 80 | 15 | 20 | 10 | 320 | |||||
| 110 | 92 | 16 | 20 | 12 | 260 | |||||
| 100 | 104 | 17 | 20 | 14 | 215 | |||||
| 90 | 116 | 18 | 20 | 16 | 200 | |||||
| 80 | 128 | 19 | 20 | 18 | 185 | |||||
| 70 | 140 | 20 | 20 | 20 | 175 | |||||
| 60 | 154 | 21 | 20 | 22 | 170 | |||||
(a) What is the level of equilibrium real GDP?
$ billion
(b) What is the equilibrium price level?
$
(c) If full employment occurs at a real GDP of $180 billion, what kind of GDP gap exists?
| Inflationary gap | |
| Recessionary gap |
Instructions: Enter your value as an absolute number (no negative sign is needed).
(d) How large is that gap?
$ billion
(e) Which macroeconomic problem exists here?
| Inflation | |
| Unemployment |
