Long-run Macroeconomic Equilibrium and Stock Market Boom
Let us assume the economy reaches its long-run macroeconomic equilibrium in 2020. When the economy is in the long run macroeconomic equilibrium, the stock market will also reach its boom. This will in turn lead to increases in stock prices more than expected, and the stock prices will stay high for some period.
Answer the following questions based on the scenarios of long macroeconomic equilibrium and consequent stock market boom.
a) Which curve will shift? Is it AS curve or AD curve? In which direction does the shift occur?
b) In the short-run, what will happen to the price level and output (real GDP)?
c) What will happen to the expected price level? What impact does this have on wage bargaining power of workers?
d) In the long-run, which curve will shift due to the change in price expectations created by the stock market boom? In which direct will it shift?
e) How does the new long-run macroeconomic equilibrium differ from the original equilibrium?
You’re interviewing two finalists for an important position in your firm. You ask each to tell a story that makes clear why they’re the best candidate for the job. Candi...Nov 11 2017
An unprincipled used-car dealer sells a car to an unsuspecting buyer, even though the dealer knows that the car will have a major breakdown within the next 6 months. The ...Aug 07 2020
A well-sealed room contains 60 kg of air at 25°C. Now solar energy enters the room at an average rate of 0.8 kJ/s while a 120-W fan is turned on to circulate the air in t...May 05 2020
Keller Company estimates that variable costs will be 60% of sales and fixed costs will total $1,920,000. The selling price of the product is $10, and 600,000 units will b...May 28 2018
Example 9.8. A pressure vessel has an internal diameter of 1 m and is to be subjected to an internal pressure of 2.75 N/mm2 above the atmospheric pressure. Considering ...Jun 24 2020
for the population of individuals who own an Iphone, suppose p=.25 is the proportion that has a given app. For a particular iphone owner, let x=1 if they have the app and...Apr 25 2020
Which of the following would NOT be a valuable Eurocurrency market transaction? A) Ford Motor Company holds temporary excess dollars in a London bank. B) Dell Computer ...Apr 20 2021
Forty years ago, your mother invested $5,000. Today, that investment is worth $430, 065.11. What is the average annual rate of return she earned on this investment? 11.68...Apr 05 2020
Jasmine Park encountered her boss, Rick Gompers, at the pop machine in the lobby. Rick is the vice president of marketing at Down South Lures Corporation. Jasmine was puz...Jul 01 2020
In May 2012, IBM was the highest priced stock in the DJIA andAlcoa was the lowest. On May 9, 2012, the DJIA opened at 12,719.01.The divisor at that time was .132457265. T...Dec 03 2019