(SOLVED) Suppose that the goal of the fiscal authority is to

Suppose that the goal of the fiscal authority is to Suppose that the goal of the fiscal authority is
to set government spending so as to achieve economic efficiency, while the goal of the
monetary authority is to achieve stability of the price level over the long run. Assume that […]

Suppose government spending increases temporarily in the New Keynesian model Suppose
government spending increases temporarily in the New Keynesian model.(a) What are the
effects on real output, consumption, investment, the price level, employment, and the real
wage?(b) Are these effects consistent with the key business cycle facts from Chapter? What […]

In the New Monetarist model suppose that the central bank In the New Monetarist model,
suppose that the central bank conducted a “quantitative easing” program by issuing outside
money and exchanging it for privately produced liquid financial assets. What would the
macroeconomic effects be? Does it matter if there is […]

Suppose in the New Monetarist model that there is deficient Suppose, in the New Monetarist
model, that there is deficient financial liquidity. If the fiscal authority were to engineer a tax cut,
financed by an increase in the quantity of government debt, with the quantity of outside money
held constant, […]

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Suppose that the central bank observes a drop in real Suppose that the central bank observes a
drop in real GDP, but does not know what caused this drop.(a) How would the central bank
respond if it believed that GDP dropped because of a decline in total factor productivity, and […]

Suppose that there is a natural disaster that destroys some Suppose that there is a natural
disaster that destroys some of the nation’s capital stock. The central bank’s goal is to stabilize
the price level. Given this goal, what should the central bank do in response to the natural
disaster? […]

In the coordination failure model suppose that consumers preferences shift In the coordination
failure model, suppose that consumers’ preferences shift so that they want to consume less
leisure and more consumption goods. Determine the effects on aggregate variables in the good
equilibrium and in the bad equilibrium, and explain your […]

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