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Home › Economics Help › MacroEcon short answer and mutilple choice questions.
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MacroEcon short answer and mutilple choice questions.

Date Posted: 13/06/2019
Category: Economics
Due Date: 16/06/2019
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  • Here are the reasons why points have been taken off: 1a) Since there was no change in money supply or any of the parameter of the LM curve, the LM curve must have remained unaffected. (-2) 1b) Nominal interest rate also rises. (-2) 1c) Since current and future price levels remained unaffected, the tax cut in 2018 must have had no impact on the expected inflation. Since the interest rate had risen while the expected inflation had remained unchanged, real interest rate must have gone up and must have caused investment to decline. (-4)
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  • 2b) Interest rates in Sweden would rise relative to those in Euro zone and would cause the krona to appreciate. (-2) IP holds (-2) 2c) Would increase its balance sheet (-2) 2d) Overall effect is a increase in private consumption. (-3) If few people take on new mortgages, the article’s conjecture that “rising mortgage payments might lead to a drop in overall demand” would be incorrect. (-2)
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