Macroeconomics Research Paper Example | Topics and Well Written Essays - 1500 words

Macroeconomics - Research Paper ExampleThis in turn influences the supply of gold in the merchandise.b) real Increased competition in the product market could cause an plus in the equilibrium rate of unemployment. When there is increased competition, firms sell products. The reduction in selling prices forces firms to reduce their labor cost through reduction of their labour requirements. Therefore increases level of unemployment.c) TRUE Fiscal policy includes revenue and government expenditure. Investment is function of saving. Government can induce human race spending through humanity investment. If the government investment is a constant figure, then the only option is to manipulate tax. In this shoes the tax increase or decrease can only increase the government expenditure which is exogenous. gum olibanum no effect on national saving.IS curve-It combines the equilibrium levels where the commodity market is at equilibrium. If interest range go pup, then the gross domest ic product (gross domestic product) goes ware. If interest order go down, the level of GDP goes up... Investment is function of saving. Government can induce public spending through public investment. If the government investment is a constant figure, then the only option is to manipulate tax. In this property the tax increase or decrease can only increase the government expenditure which is exogenous. hence no effect on national saving. I=f(s)Where I investment and S is national saving. d) TRUE Multiplier effect is the effect of a change in investment on income Y. It was true that if custom and investment are exogenous the Keynesian multiplier equals oneQuestion threeIf there is an increase in deposits of bank reserves will lead to less cash supply.IS curve-It combines the equilibrium levels where the commodity market is at equilibrium. If interest rates go pup, then the gross domestic product (GDP) goes down. If interest rates go down, the level of GDP goes upLM curve- it jo ins together combinations of the rate of interest and national income at which the monetary sector is at equilibrium.IS curve - Joins the combinations of rate of interest and levels of income at which the product market is at equilibrium.Factors that cause a shift in LM curve area) Change in traffic demand for notesb) Change in the speculative demand for cashc) Change in the money supplyAn increase in money supply will shift the LM curve to the right. A decrease shifts the LM curve to the left.In our case where there is a decrease in money supply, we expect the LM curve shift to the left.In the short runEffects of decreased money supply.From the above graph, it is evident that the rate of interest goes up from ie to i1.The level of output also goes down from Ye to Yi.The inflation level also goes up due to an increase